Fears of a European recession are on the rise.

As gas prices continue to rise and consumer confidence drops, not to mention the ongoing war in Ukraine, the European economy is taking a sizable hit. Recession fears are at an all-time high, and as of this morning, those fears are beginning to directly affect Europe’s primary currency.

Today, the value of the Euro suffered its biggest drop-off in at least 20 years, sliding by 1.3% to a USD equivalent of $1.029. Back in June, inflation around the EU had skyrocketed to around 8%, prompting the European Central Bank to announce upcoming interest rate hikes, the first such hikes in over a decade. Investor morale is currently at an all-time low, and with fears of recession looming and consumer sentiment souring, it’s possible that an interest rate increase may not be able to stave off the inevitable.

LATEST: Euro drops to lowest since 2003 against the US dollar https://t.co/BnA2ay8kS3 pic.twitter.com/P3VY0LAnrT

— Bloomberg Markets (@markets) July 5, 2022

The actions of the ECB mirror those taken and planned by the United States Federal Reserve, though unlike the euro, investors still see the US dollar as a safe zone for investments. Of course, as announced by Federal Reserve Chair Jerome Powell, who raised interest rates by 0.75% last month, there will likely be more rate hikes in the not too distant future, so whether the dollar remains the international investment currency of choice remains to be seen.