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Investors are dumping the euro at a rate not seen since the collapse of Lehman Brothers amid warnings that the single currency could hit parity with the dollar.
Research by Bank of New York Mellon today showed pension funds and banks concerned about the debt crisis in southern Europe sold euros this month at the fastest pace since the second half of 2008.
The euro crashed to a 12-month low of $1.3113 this week but it was up by 0.52 cent to $1.3272 today.
It has lost 13% of its value against the dollar since November.
Currency analysts warned that €1 could be worth just $1 if the debt crisis is not resolved soon.
Duncan Higgins, currency market analyst at Caxton FX, said: “There is definitely scope for the price to reach that level. All the factors are working in favour of the dollar.
“The depth of this eurozone crisis would have to be sustained for some time, but that is looking ever more likely as fears spread,” Higgins added.
“Even if the IMF agree to throw more money into Greece, as I expect they will, the problem is simply being delayed.”
Reader views (1)
The only way out of this Eurozone mess as Greece wont leave the Euro is to introduce a "Greek Euro". Forinstance America has a Dollar, Canada has a Dollar, and Australia, but all worth different amounts. Greece is not a manufacturing nation and their tourism is down due to the high Euro, they cant devalue the Dracma like Spain did in the 70's when they devalued the Peseta by 10% to boost tourism, Greece must be made to stand on its own two feet without being supported by EU members who have enough troubles of their own.
- Trader Jim, Lake District, 30/04/2010 09:30
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