* Euro seen flat around $1.27-$1.28 over next 12 mths
* Slight majority see euro/dollar under current level in 3 months
* Three-month forecasts in wide range, from $1.14 to $1.45
By Nigel Davies
LONDON, Feb 5 (Reuters) - The euro may hold its ground against the dollar this year, but at least one more interest rate cut and a fragmented European response to the financial crisis could yet see it tumble further, a Reuters poll showed.
Many analysts are convinced the worst losses for the euro against the greenback are already racked up despite it having fallen quite consistently since mid-December and losing around 10 percent of its value in that time.
A monthly survey of over 60 global foreign exchange analysts from New York to Sydney showed the euro trading at $1.27 in six months and finishing the year at $1.28, just shy of its current level.
A nasty economic outlook for both the U.S. and euro zone has resulted in flat consensus euro/dollar forecasts across the board, with many analysts seemingly stuck to make a firm call either way with currency volatility so high.
But the euro could easily extend its downward trajectory as the European Central Bank cuts rates, sovereign ratings are downgraded, and governments respond largely individually to a financial crisis that has infected every euro zone economy.
Indeed a slight majority see the euro trading below its current level in three months.
"The fact there has not been a coordinated response from Europe just leaves us more confident the euro outlook remains challenging," said Paul Robson at RBS.
He said that lower interest rates from the ECB, and a sharp slowdown in once speedily growing Eastern Europe would also hurt the euro, forecasting it to fall to $1.15 in three months.
The ECB left interest rates on hold at 2.0 percent on Thursday but is widely expected to cut them next month.
The euro remained under pressure through January partly from credit rating downgrades for euro zone countries Spain, Greece and Portugal. It was also hit by broader worries over Russia's downgrade on Wednesday.
A month of fierce currency volatility has led to increased speculation that some central banks, such as the Swiss National Bank, may directly intervene on currency markets to halt the Swiss franc's rally. See
TWO DEMONS
Forecasts for the euro in the poll were wide-ranging, with many still pessimistic about the long-term run ahead for the dollar. Forecasts for one month's time covered $1.17 to $1.43 and $1.09 to $1.60 in 12 months.
And with high uncertainties over how economies manage their way through recessions, volatility could well remain high.
"We will see several months now of the euro whacking around between $1.27 and $1.45, just like we had in December," said Nicole Elliott at Mizuho Corporate Bank.
"We are fighting between two demons -- doubts as to who precisely is the euro zone's lender of last resort, versus the monumental scale of the American economic catastrophe," she added.
Elliott forecast the euro to rally as high as $1.50 in six months and up to $1.60 in a year.
The poll also showed the Japanese yen holding below the 100 mark to the dollar for the entire year ahead. It was seen holding on to risk aversion gains, only easing slightly in a year's time to trade at 97.
Meanwhile, the battered pound could be in for another hit in the next three months given that the Bank of England, which cut rates again on Thursday, is seen potentially following the U.S. Federal Reserve's lead in taking them close to zero.
The poll, taken before the widely expected rate decision, forecast sterling would slip to $1.40 in three months, creeping back to $1.52 in a year, while the chances of the euro breaking parity to the pound have also eased.
(Polling by Bangalore Polling Unit; Editing by Ruth Pitchford)