Euro resilience - what will it take to fall?

With all of the problmes in the EU, it is surprising to not see the euro fall further. It has moved from highs of around 1.50 to 1.35 against the dollar. We saw the euro fall to the 80's in the initial post common currency period. The euro may fall apart yet the delcine is trvial relative to bond prices and equity markets. What gives? 

Rates are higher than in the US, but this seems to be silly reason to hold euros. We expect the ECB to be looser and we also expect fiscal policy to be looser to meet the fiscal shortfalls across the EU. The US is having problems, but we should expect a stronger desire for dollars, or almost any G10 currency.