This of course is the worst-case scenario but it is certainly almost unavoidable for the euro to drop heavily against other major world currencies especially in the first part of 2012.
Mario Draghi, the head of the ECB is doing everything possible to avoid quantatitive easing (printing more euros) as has been used in the US to ease the crisis but signs are that the eurozone is already in mild recession and nothing is expected to improve quickly.
The aptly titled PIIGS (Portugal, Italy, Ireland, Greece and Spain) are all in substantial fiscal trouble and they are in danger of dragging the rest of the eurozone down with them.
Jason Bradford, Managing Director of Lloyds International's trading division expects the euro to drop substantially in the coming months. "Germany has so far avoided the doom and gloom that is affecting the rest of Europe but France is already slated to run into recession in 2012 and it is not inconceivable that either of these countries can end up in big trouble partly due their banks holding large amounts of the sovereign-debt of the weaker eurozone countries."
Political uncertainty and a lack of confidence coupled with austerity measures are also likely to badly affect the price of the euro in 2012. Overall it's not good news for the eurozone or it's single currency.
Jason Bradford and Lloyds International Brazil are holding various put options in the euro against several world currencies on behalf of clients.
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