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Euro to continue fall against dollar

Business Materials 12 January 2012 17:08 (UTC +04:00)

Azerbaijan, Baku, Jan. 12 /Trend A.Badalova/

European currency will continue to fall against dollar in 2012 on the fears of European debt crisis escalation and likelihood of European Monetary Union (EMU) break-up, leading analysts of the British economic research and consulting company Capital Economics believe.

"Both the relative prospects for monetary policy in the euro-zone and the US and the likelihood of a break-up of EMU this year suggest the euro has considerably further to fall," analysts said in their report.

According to Capital Economics analysts' central scenario, a break-up of EMU, initially involving Greece's departure, will occur this year.

This week European currency fell below $1.27 against dollar, which is close to the euro's lowest level since the autumn of 2010.

Capital Economics analysts believe euro to fall against dollar to $1.10 by the end of 2012.

"The euro could still be dragged down further against the dollar by a shift in the relative prospects for unconventional monetary policy in the euro-zone and the US," analysts believe.

In the first quarter of 2012 analysts predict euro to drop to $1.25 and then will continue to drop to $1.20 in the second quarter and to $1.15 in the third quarter of this year.

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