European stocks and the euro will face fresh turbulence in 2012 after a year in which equity markets slumped and the single currency lost ground against the dollar mainly due to the Eurozone crisis.
Europe's main stock markets have tumbled between 6.5 per cent and 25 per cent since the start of 2011, as traders looked past positive economic data and earnings, while the euro has fallen 2.5 per cent versus the dollar in volatile trading.
Yields on Eurozone sovereign debt meanwhile rocketed in late 2011 as investors demanded top returns for lending money to the bloc's indebted countries such as Greece and Italy.
"Attempting to forecast where the dollar, euro, gold, oil or any Western stock market might end next year is no less a mugs game than it was this time last year," said Howard Wheeldon, a senior strategist at BGC Partners.
"Who could have imagined that by the 11th month of the year we would have been talking about not only the collapse of the Eurozone but also a possible breakdown of the European Union?
"Who would have thought that in such a short space of time the economies of Europe would have effectively ground to a halt and that the outlook for resumption of growth would be virtually nonexistent?" he questioned.
The Eurozone debt crisis dominated market sentiment in 2011 and is widely expected to be the main focus in 2012, at least in the early part of the year, overshadowing geopolitical strains and US polls.
The euro ended the year by briefly diving under $1.30 and hitting the lowest point since the start of 2011. By Friday, it had recovered slightly to trade at $1.3076.
The single currency meanwhile plunged to a 10-year low point against the yen in September as investors reacted to mounting economic uncertainty and tumbling equities in Europe and the United States.
"2012 is likely to be dominated by the quest for safe havens on the foreign exchange markets, as risks are omnipresent," said Commerzbank analyst Ulrich Leuchtmann.
"The Eurozone debt crisis is threatening to escalate or at least to become a permanent institution connected to a high level of anxiety. Globally economies are either sliding into recession or have to expect falling growth levels.