The Euro has hit a new four year low of 1.1873 against the US dollar (7 th June) with little hope of a rebound, a leading City expert said.

Phil McHugh, senior executive dealer at the foreign exchange firm Currencies Direct said: “The recent fears from Hungary, although it is itself outside the euro, have heightened the threat of contagion emanating from the Eurozone. We have seen CDS (Credit Default Spreads) widen further in Hungary, Spain and Italy - this has pushed the value of the euro down to a new low due to heightened fear and risk in the markets.

“The future of the Euro has also been called into question, most recently through a survey in the Daily Telegraph which foretells the collapse of the euro within 5 years. Within a very short space of time the euro has swung from ‘stable to questionable’ and talk of a euro collapse with countries leaving the single currency is no longer taboo.

“The inception of the euro as a political vehicle has now been surpassed by hard economic realities. Whatever the future for the Eurozone, we can be sure that growth and confidence as a whole will suffer in the short term and this will play into a weaker euro.”