Panic among investors has pushed the euro and pound to oversold levels, says Philip Manduca, head of investment for The ECU Group currency managers in London.

With the euro having dropped to a four-year low beneath $1.23, that area is a good spot to buy the currency, he says.

“The news is overblown to the downside,” Manduca said.

“We don’t think that the euro is going to fall apart. The political will in Europe remains paramount and is being discounted by foreign exchange operators,” he told Bloomberg.

Meanwhile, the “biggest story in the foreign exchange market is the pound at the moment,” Manduca said.

“The pound is definitely oversold on every technical (chart-based) count we look at. The fundamental reasons aren’t quite there yet. But fundamentals tend to lag the technicals.”

The pound recently traded at around $1.43.

As for the fundamentals, both continental Europe and the United Kingdom are starting to deal with their massive deficits, Manduca notes.

“Surely that means some reward. It should be currencies like the yen and dollar that are punished for their continued fiscal laxity,” he said.

“There’s going to come a tipping point where the U.S. becomes the eye of the storm.”

Deserved or not, the euro’s weakness isn’t a bad thing for Europe, according to an editorial in the Financial Times.

“If the euro’s weakness – or the euro zone’s competitiveness, which is the same thing – persists for some time, it will boost the net exports of all euro zone countries,” the editorial states.