The weak euro: Look out below!

The euro is up against the dollar this year. But barely. And some experts think the euro will soon hit new lows versus the greenback. Click chart for more on currencies.

NEW YORK (CNNMoney) -- At risk of sounding like Ed McMahon and Johnny Carson ...

The euro is really cold. How cold is it? It's so cold that not even those tent-less Occupy Wall Streeters will burn euros to keep themselves warm.

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Ha ha ha! YES! (Clearly Leno and Letterman have nothing to fear from me.)

The debt crisis in Greece, Italy, Spain, Portugal, Ireland, France, Belgium ... oh wait, let me just save words and start over. The debt crisis in everything not named Germany is threatening the viability of the euro currency itself.

The euro has plunged more than 4% against the dollar in just the past three weeks. And while a 4% drop may not sound like that much, it really is in the more staid world of currencies.

Despite a slight bounce on Thursday morning, most currency experts think the euro probably has a lot more room to fall.

The euro is trading around $1.35. Dean Popplewell, chief currency strategist at OANDA in Toronto, said the euro faces more downside unless someone -- be it the European Central Bank or the International Monetary Fund -- steps up with a viable plan to backstop the debt of Italy and Spain. And maybe even France.

"There's a tennis match between the ECB and IMF. The lack of a major ECB presence in the bond market has shaken confidence," Popplewell said. "At the moment, the market would like a relief bounce for the euro, but it's vulnerable to more weakness."

So how low could the euro go? Kathy Lien, director of global research and analysis at currency broker GFT in Jersey City, N.J., said the euro will likely head back toward recent lows from early October of about $1.315.

Lien said a Greek default is now largely expected but that news will have to get much worse for the euro to plunge further.

"There is a good possibility the euro could retest the lows, but $1.30 is a psychologically significant level. It won't go there unless Italy actually defaults and Spain follows," she said.

Presumably, the ECB and IMF won't let it get to that point.

On the other hand, since the euro crisis began in earnest in early 2010, the one thing investors can reliably count on is that European leaders will delay key decisions until the last possible moment. (Just like American politicians ... but that's a story for another day.)

Why Germany needs the euro

That's why there could be more pain ahead for the euro.

"What would be helpful would be if Europe clarifies the bailout process," said Axel Merk, president of Merk Mutual Funds, a Palo Alto, Calif.-based money manager specializing in currency investments.

"Greece has to default at some point but bad news is better than no news. If you don't know where things are heading, that's a problem," he added.

Merk said what makes things more difficult is the fact that the solution many people are clamoring for to "save" Europe -- a bold ECB debt-buying plan similar to various Federal Reserve efforts -- might only make the euro even weaker.

As hated as the euro has been in recent weeks, it is actually up slightly for the year against the dollar, Merk noted. And he attributes that to the fact that the ECB doesn't want to further devalue the euro by splurging on sovereign debt.

"So far, the ECB is not trying to print their way out of this mess. That's why the euro isn't doing worse," he said.

Now what does all of this really mean for the United States?

On the one hand, a weaker euro could have one major positive effect.

Europe credit crunch fears are growing

Crude oil prices -- which have risen recently following the reversal of a bottleneck at a key pipeline in Oklahoma that was causing a supply glut -- should fall if the dollar strengthens against the euro. Usually, oil rallies when the greenback is weak against the euro because futures are traded in dollars.

But a pullback in oil due to an anemic euro may be offset by the hit to profits that large U.S. companies may take due to a strong dollar. We also can't forget the reason the euro is so weak in the first place.

Debt contagion in Europe is bad news for U.S. banks with exposure to Italian, Greek, Spanish and French debt. And a severe recession in Europe is not good for key trading partners like China and, oh yeah, the United States.

So it would really be foolish to root for the euro to fall much further just because oil prices might come down -- or because a vacation to Rome or Paris would be cheaper. The euro eventually could fall so far that investors will lose faith in the entire continent -- including a certain Teutonic titan.

"If this continues, people will question strength of Germany. Can it really shoulder the entire burden of Europe?" Popplewell said.

Hopefully, we won't need to find out the answer to that question.

The opinions expressed in this commentary are solely those of Paul R. La Monica. Other than Time Warner, the parent of CNNMoney, and Abbott Laboratories, La Monica does not own positions in any individual stocks.