The euro could fall as low as $ 1.31 if the problems of sovereign debt climbing , Nomura's Nordvig Says

The concern that some European countries will have difficulty paying their debt has pushed the euro by 12 percent against the dollar since 2008 and can be pushed even lower, according to Nomura Holdings Inc.

The euro could fall as low as $ 1.31 if the problems of sovereign debt climbing, Jens Nordvig, managing director of currency research at Nomura in New York, wrote in a note to clients. The present crisis represents a premium of 12 percent of currency risk, Nordvig wrote, quoting Nomura model.

The 16-nation currency fell 0.5 percent to $ 1.3619 in New York today, near a six-week low of $ 1.3574 reached on 12 November. While it has fallen 4.9 percent against the dollar this year has increased by 14 percent from a low of 2010 on June 7 by the concern that a new round of program buying bonds Federal Reserve known as quantitative easing of destroying the dollar.

"The euro has been on a roller coaster in the last year," he wrote Nordvig. "There was a significant upward pressure on the euro / dollar since the start of the Fed's QE2. Meanwhile, peripheral tensions within the eurozone have risen again, putting significant downward pressure on the euro."

The euro traded at $ 1.38 in six months if the sovereign risk remains more or less constant, Nordvig wrote. The currency will drop to $ 1.33 if you increase the concern of the debt, and $ 1.31 if the European debt crisis has an impact on the current expectations of change. The common currency will strengthen to $ 1.44 if the sovereign risk of the debt falls, he wrote.

Investors should trade between the euro and other European currencies, not just the dollar, Nordvig said in a radio

"The euro crosses, like the euro, Sweden, Norway, the euro and the pound sterling, euro, not fully reflected, as has been reflected in the euro and the dollar," said Nordvig.