Euro drops below 1.35 for a dollar

• Could the exchange rate drop to 1.20 - 1.25 dollars/Euro at the end of the year?

Yesterday in the forex market, the Euro depreciated to the lowest level in the last three weeks against the dollar, amid speculation that the leaders of the European Union, will fail to reach an agreement on the aid for Greece.

The Euro had depreciated 0.5% at 9:46, during the New York session, to 1.3497 against the dollar, from 1.3558 at the close of the previous day. On Monday, the Euro dropped to 1.3464 against the dollar, the lowest price since March 2nd.

Since the beginning of 2010, the Euro lost 5.9% against the dollar, with the weakest evolution against the US Dollar, after the British Pound.

The specialists of Japanese brokerage firm "Nomura Holdings" Inc. consider that the Euro could drop to 1.25 dollars by the end of the year, in case the Greek fiscal crisis would drive the investors away from the region. Furthermore, "Nomura" analysts say that the European currency is also pressured because the European Central Bank shows no sign that it would raise the interest rate before the end of the current year. "Nomura" previously estimated that the European Central Bank would raise the interest rate at the end of Q3 2010.

"BlueGold Capital Management" LLP has an even gloomier prediction for the evolution of the Euro, anticipating that it will depreciate to 1.20 dollars for the first time since March 2006, as long as the crisis in Greece creates a divergence between the monetary policies of the ECB and of the Federal Reserve (the central bank of the USA).