The euro dropped below parity against the dollar on Wednesday for the first time in almost two decades, as a hawkish U.S. Federal Reserve and growing concern about rising recession risks in the euro area continued to batter the single currency.

At 1245 GMT, it was changing hands at $0.998, down 0.4 percent on the day, its lowest level since December 2002.

The single currency has lost more than 10% so far this year versus a surging greenback and the drop below parity came after another strong set of U.S. inflation data. (Reporting by Elizabeth Howcroft and Saikat Chatterjee; editing by Dhara Ranasinghe)