German Support Fails to Shore up Euro

In spite of the uncertainty regarding Greece’s future position in the Eurozone, with fears of the country exiting the currency, the Euro still managed to hold fairly steady last week thanks to Germany.

The German economy showed a modest growth in the first quarter of this year, a very welcome silver lining given the Eurozone’s overall poor showing. This modest growth figure, in fact, helped keep the Eurozone as a whole from falling back into recession although many of the nations are going through a slump.

Ongoing Greek Crisis Threatens Euro

However, things are not going as well right now with the ongoing crisis in Greece overwhelming any positives that Germany may have contributed to the Eurozone. For the first quarter of 2012, the performance of the Eurozone has not been very heartening at all and Greece has played a huge role in keeping the investor sentiments subdued here. There is no clarity yet on what Greece is likely to do and until something is known, the fate of the Euro will remain uncertain.

Steep Dip in Euro

The Euro dipped steeply to fall to a level it has not touched in two months when compared with the dollar. This is a reaction to the fears that Greece may finally announce its Euro exit in the Brussels meet of the European Union leaders this week. A previous gain against the yen was wiped out with this dip too. Forex traders will remember that the yen itself is under immense pressure, falling against the dollar for the first time in a month.

A statement by former Greek Prime Minister Papademos indicated that the Greek exit may actually become a reality very soon. This has not helped boost the morale of the market at all. An official statement throwing light on exactly what route Greece will take will at least eliminate the confusion in the market which is keeping the Euro under immense pressure right now. For forex traders with exposure to Euro, keeping a close watch for the outcome of the European leaders meeting will yield some valuable information.