On Friday, the euro sank to a new low against the dollar, dragging down exchange traded funds (ETFs) with it. As concerns about Europe’s economy continue to mount, is the euro on a path toward parity with the U.S. dollar?

As Greece’s fiscal debt problems become more obvious and they begin to spread to other economies, does the euro stand much of a fighting chance? The euro is now past four-year lows against the U.S. dollar, below $1.20 on fears about Greece and the other PIIGS (Portugal, Italy, Ireland, Greece and Spain) – and now Hungary. [Europe ETFs Hit By Greece.]

The euro could sink to $1.18, the level at which it closed on its first day of trading in 1999, says Bradley Davis for The Wall Street Journal.

There’s a conundrum vexing the continent.

Weaker states don’t like having their economic policies dictated by Germany. And stronger states don’t like spending billions to bail out their brethren from years of fiscal mismanagement. Back when the euro was first introduced, skeptics worried that the then-11-member states were too divergent to share a single currency and monetary policy. Those fears have been coming to pass lately. [How to Hedge Euro Currency Risk.]

For more stories about the euro, visit our euro category.

  • CurrencyShares Euro Trust (NYSEArca: FXE)

  • WisdomTree Dreyfus Euro (NYSEArca: EU)

Read the disclaimer; Tom Lydon is a board member of Rydex|SGI.

Tisha Guerrero contributed to this article.

The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Mr. Lydon serves as an independent trustee of certain mutual funds and ETFs that are managed by Guggenheim Investments; however, any opinions or forecasts expressed herein are solely those of Mr. Lydon and not those of Guggenheim Funds, Guggenheim Investments, Guggenheim Specialized Products, LLC or any of their affiliates. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.