Euro hits lowest value against US dollar since 2002

ANKARA

The euro hit its lowest value against the US dollar since 2002 on Tuesday as the monetary policy gap between the European Central Bank (ECB) and the US Federal Reserve is expected to widen amid a surge in gas prices.

The euro/US dollar exchange rate fell below 1.03 for the first time since December 2002.

The Euro area annual inflation reached a new record high of 8.6% in June due to high energy prices.

ECB head Christine Lagarde had said the bank intends to raise interest rates by 25 basis points in July, while the market believes that the faster rate hikes signal will not be enough to curb inflation.

In June, the Fed raised its benchmark interest rate by 75 basis points, marking its biggest rate hike in 28 years.