Euro plummets to fresh lows against basket of currencies

The euro's woes continued this afternoon after it plummeted against a basket of currencies, tumbling to a 14 month low against the US dollar ($1.2738), a 6 month low against the British pound (1.1846) and a lifetime low against the Swiss Franc (1.4147).

Mark Bolsom, Head of the UK Trading Desk at Travelex Global Business Payments said "The seriousness of this situation cannot be overemphasised. The euro is under heavy selling pressure as the situation in Greece reaches crisis point. The markets are worried that Greece will default on their loan repayments and have no confidence in the bail-out package the IMF are trying to push through.

"There is also mounting concern that the crisis could spread to other member states and the added threats of contagion is exacerbating investors concerns. The markets just don't have any confidence in the Eurozone's financial system."

So how low will the euro go? Bolsom comments, "We have had euro/dollar parity before so there is a precedent. Although we have some way to go, the euro has already lost about 15 per cent of it's value against the dollar since November 2009 and I believe there is a definite possibility it will meet parity over the medium-term this year. Until the markets are persuaded that Greece has stabilised, it is likely nothing will stop the euro's rapid descent."