The euro breached parity with the dollar yesterday as it fell to a record low of less than 99 US cents, reports the Financial Times.

Aftar a promising start this year, the euro has resumed a steady slide that last year saw it lose 15% of its initial value against the US currency. Yesterday's fall, at a time of mounting international unease about the weakness of the currency, also dragged down euro-denominated bond prices. The yields on the German 10-year benchmark gained 10 basis points, closing at 5.63%. The fall in parity is a set back for the government, which hopes to hold a referendum on UK membership of the single currency in the next parliament.