Euro falling towards parity pain point

The euro has lost 10% versus the dollar this year and at $1.0238 is close to the psychologically crucial parity point it last saw in mid-2002, when it was just three years old

A stampede for dollars as global recession risks mount has left other currencies battered and bruised, with the euro getting trampled on more than most as surging European gas prices worsen economic growth fears.

The euro is seen as particularly vulnerable given Germany, Italy and others' heavy dependence on Russian gas, and fears that sizeable European Central Bank rate hikes could reignite another euro zone debt crisis.

Nomura's analysts have cut their euro/dollar target to $0.95 and said parity could be breached as soon as August. Citibank says a move to parity is "inevitable."

However, Nomura said that $0.95 was not that important historically, noting that the euro fell from $1.17 after its creation to $0.82 in October 2002. Extrapolating backwards using its legacy currencies, the euro traded as weak as $0.6444 in February 1985, they added.