The euro faces another nervous week on the currency markets, after hitting fresh lows of below $1.03 on Friday. Many analysts believe that it is now only a mater of time before it falls to parity with the US currency and expect fresh waves of selling to hit the currency in the days ahead.

EU leaders on Friday decided not to issue a detailed statement on the currency and the European Central Bank (ECB) is also thought unlikely to intervene in the market by buying the currency, for fear of setting itself up for an attack by speculators. Market attention will now be closely focused on any comments from the ECB and on economic figures from both sides of the Atlantic, which have recently been pointing to a robust US economy compared to economic weakness in the big euro-zone economies, particularly Italy and Germany.

A survey published over the weekend indicated that Germans are losing their confidence in the euro, with 59 per cent of them convinced that it will be a weak currency. The survey was commissioned by the Welt am Sonntag newspaper. The newspaper said that the number of pessimists more than doubled since January when only 28 per cent of those polled expected the new common European currency to be a weak one.

Welt am Sonntag said that 75 per cent of those surveyed by the Dimap polling institute believed that the weak euro was hurting Germany's economic growth.

Of 500 people participating in the poll 68 per cent said they expected their personal economic situation to be "rather negatively affected" by the weak euro and only 13 per cent saw a "rather positive" impact.

Since its launch in January the euro has lost about 12 per cent against the US dollar and closed at $1.0375 on Friday after hitting earlier in the day a life low of $1.0275 in Asian trade.

The weakness of the currency is also fuelling debate in the UK over whether sterling should join the euro. The exact timing of a UK referendum to join a single European currency hinges on the success of the euro project and the economic conditions being right for British entry, the British Prime Minister, Mr Tony Blair said yesterday.

"We do want to be part of a successful single currency but it has to be successful and the economic conditions for Britain have to be right," Mr Blair told BBC Television.

Blair derided the opposition Conservative party's calls for Britain to ditch the National Changeover Plan, which sets out a series of measures to prepare the country for eventual entry into the euro.