The euro has reached parity with the dollar for the first time in two and a half years.
The European single currency has been gaining against US currency since April when worries over corporate accounting practices first arose.
The dollar has been sliding on world markets since investors turned their backs on US equities as concerns mount over corporate accounting scandals.
When less people invest in US securities, there is a corresponding fall in the demand for US dollars resulting in a fall in the value of the currency.
Interest rates in the eurozone are higher than in the US making investment in euro cash and bonds more attractive.
The euro first came into existence in January 1999 and at time traded at $1.17. It fell to a low of $0.83 before swinging back up earlier this year.
The good news for Europe is that an appreciation in the value of the euro may stave off any interest rate hikes. However, it is not good for some exports.
Economist Jim Power says over a quarter of Ireland's exports are bound for the UK and the US and the appreciation of the euro damages Irish competitiveness in these markets.
The rise in the value of the euro looks set to continue as investors choose cash over shares. Billions of pounds have been wiped off the value of UK shares as the FTSE 100 index dropped a further five per cent to levels not seen since December 1996.
Hitting parity with the dollar is a symbolic breakthrough for the single currency.
An RTÉ News report broadcast on 15 July 2002. The reporter is Robert Shortt.
