NEW YORK - The dollar surged to its highest level against the euro in more than four years Friday as a report showed U.S. hiring remained weak, and a Hungarian official's warning about the state of his country's economy deepened anxiety over Europe's debt crisis.
The euro sank as low as $1.1956, its weakest level since it bought $1.1920 in March 2006 and well below the $1.2182 it bought in New York late Thursday.
A fall below $1.20 prompted a new wave of selling, said Marc Chandler of Brown Brothers Harriman in New York.
"At this point, the market is looking for excuses to take the [euro] back to the original launch rate of 1.18 [against the dollar] with increased talk of eventual parity a year or two out," Michael Woolfolk of Bank of New York Mellon wrote in a note to investors.
The euro has weakened on worries about Europe's growth prospects and the effects of government spending cuts as indebted European countries try to align their budgets with European Union mandates.
Peter Szijjarto, the spokesman for Hungary's new prime minister, said that the country's economy was in a "grave" situation but that the government was ready to avoid a crisis like the one facing Greece, which was bailed out by the EU. Spain and Portugal are also struggling.
Hungary is an EU member but doesn't use the euro.