The euro came under renewed pressure on Friday, falling to an 11-year low against the yen as a fresh round of downbeat data intensified fears the troubled region is heading for recession.
The single currency also hit new lows against the dollar and the pound, as a combination of falling retail sales in the eurozone and a sharp drop in German factory orders knocked investors' confidence.
"[Friday's] batch of eurozone data has recession written all over it," said Martin van Vliet, senior economist at ING.
It came as Nicolas Sarkozy, the French President, warned the end of the euro could signal the end of peace.
"The euro is the heart of Europe (Chicago Options: ^REURUSD - news) . If the euro is destroyed, it's the whole of Europe that goes up in smoke. If Europe goes up in smoke it's the peace of our continent that will be one day or another be called into question," he said following talks with the Italian prime minister Mario Monti.
The euro touched a low of 97.88 yen, which was the lowest level since mid December 2011. It also fell to a 16-month low against the pound, at 82.39p, and to a near 16-month low against the dollar of $1.2696.
The contrasting fortunes of the eurozone and US were brought sharply into focus as US jobs figures came in surprisingly strong, while eurozone data was weaker than expected.
European retail sales fell 0.8pc in November (Stuttgart: A0Z24E - news) , in a sign that the region's consumers were increasingly unwilling to spend. Economists had expected a smaller fall of 0.4pc, after sales rose modestly by 0.1pc in October.
"Looking ahead, it is difficult to envisage a decisive improvement in the outlook for private consumption," said Fabio Fois of Barclays Capital. "The unemployment rate continues to be elevated and it is unlikely to decline any time soon, in our view."
The eurozone Economic Sentiment Indicator fell for a 10th consecutive month in December, to 93.3 from 93.8 in November. Confidence (BSE: ZCONFIDE.BO - news) fell in the services, retail and consumer sectors, but was broadly stable in industry and construction.
Jennifer McKeown, senior European economist at Capital Economics, said Friday's data was confirmation that the eurozone economy was in "a very bad state".
"In all, [the] data support our view that the eurozone is heading into a much deeper recession than the consensus forecast suggests," she said. "We expect a fall in GDP of about 1pc this year and an even sharper decline in 2013."
Separate data showed German factory orders fell by 4.8pc in November, following a 5pc rise in October. It was a much sharper fall than the 1.8pc decline forecast and was chiefly driven by an 8pc slump in foreign orders.
Christine Lagarde, head of the International Monetary Fund, said earlier in the day that the euro would likely survive 2012.
"Will 2012 be the end of the euro currency? I seriously don't think so," she said on a visit to South Africa.
Ms Lagarde said that while there were "serious pressures and issues" concerning sovereign debt and the strength of the banking system, "the currency itself is not one that would vanish or disappear in 2012, not at all".
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