Every day for the past week or so, the euro has fallen to new lows against the US dollar. Early on Thursday it dropped to a lifetime low of $1.0303.

It could be just days before one euro is worth the same as one dollar - something few thought would ever happen.

But is a weak currency a bad thing in itself?

Not necessarily.

The days of euro triumphalism are over

Many manufacturers actually welcome a falling exchange rate because it makes their products cheaper abroad and therefore boosts exports.

In Germany and Italy - whose weaker-than-expected economies have been partly to blame for the euro's fall - a weak currency is exactly what they need.

In Britain it is the opposite - a strong pound has been a major headache for exporters for nearly two years.

The reasons for the euro's weakness are varied:

• a strong American economy attracting investors away from a struggling Germany and Italy;
• the war in Kosovo;
• the Italian government's recent relaxation of its budget deficit rules.

But if the weakness of the euro is no bad thing economically, it does not necessarily follow that it is not important politically.

Much of the problem stems from the hype that surrounded the euro's birth at the beginning of the year.

It was to be a reserve currency to rival the dollar; there were even worries that it would be too strong.

Now the politicians and the bankers are trying to "talk up" the euro without actually intervening in the open markets.

It all adds up to a serious credibility gap.

And that could put off potential investors, who will not want to risk putting their money into a currency that will lose its value.

This matters politically in countries like Britain, where the battle between the pros and antis is only just warming up.

Already the weakness of the euro has been responsible for eroding public support. A Mori poll has found that if a referendum was held now just 31% would vote to join the single currency, compared with 38% just after it was launched.

In the eurozone itself the euro's success will depend entirely on political will. If public support there begins to fade then the euro could be in real trouble.