We're still far from a 1 to 1 ratio but the drop has still been significant. After testing the $1.30 number last month, it broke through. Analysts say the next test will be at $1.26 which isn't far away. Now that the euro is weakening, the price of gas could also start to become even more painful in the eurozone. This is not going to be an easy year for Europe.
The euro hovered near a 16-month low against the dollar and an 11-year low versus the Japanese yen on Friday, with further declines seen in store for the embattled single currency. As worries about the euro zone debt crisis remain unabated, the single currency looked set to end the first week of 2012 near a record low against the Australian dollar and a 16-month trough versus sterling. Market players said little relief was in sight for the euro, with next week's Italian and Spanish government bond sales likely to keep the market on edge and the euro under pressure.