Western analysts forecast euro for 2010-2011

Azerbaijan, Baku, May 21 / Trend A.Badalova /

Pessimism about the future of the euro continues to grow. Analysts predict its further decline in comparison with the dollar in the short term.

Deutsche Bank Chief Economist Thomas Mayer earlier said Greece's financial problems could lead to the equalization of the euro with the dollar. Mayer said $1 may amount to 1.2 euro by late 2010.

Last week, the euro fell to a record minimum for the past four years. The euro has fallen in price to the dollar to $1.2235. In total, the European currency has lost 14 percent of its value against the dollar since early 2010. Greece's serious financial problems led to the euro's sharp decline, which has already been observed for several months. This week, Greece received a tranche of 14.5 billion euro from the EU in financial support. A week before the International Monetary Fund (IMF) granted 5.5 billion euro to the country.

Analysts at the leading British consulting company Economic Research Capital Economics forecast that the euro would hit $1.1 by late 2010. Earlier, analysts predicted the figure to reach $1.2 by late 2010.

Analysts predict the equalization of the euro to the dollar by late 2011.

"If our forecasts for slowing GDP growth in the Eurozone relative to the dollar is verified and concerns about the fiscal crisis and the future of the euro remain, the further weakening of European currencies is highly likely," the analysts reported.

British analysts forecast that the euro would hit $1.25 in the second quarter, then drop to $1.15 and $1.1 in the third and fourth quarters.

Analysts at the U.S. investment bank Morgan Stanley predict the rate of the euro against the dollar to be $1.24 by late 2010.

The Swiss bank UBS also significantly lowered its forecasts to $1.15 by late 2010 and $1.1 by late 2011.

Projections for the Euro to the Dollar for 2010-2011:

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