Euro Weakness - Greece And China Fears

Stronger yuan may deal another blow to euro
A loosening in China's yuan policy that lets the currency rise while keeping it pegged to the dollar may deal another blow to the battered euro as such a move is seen slowing China's accumulation of foreign reserves.
Market speculation is growing that China may soon allow the yuan to strengthen against the dollar from the level at which it has been effectively pegged since mid-2008, and allow it to appreciate by around 5 percent by year-end to slow inflation.

Is Greece just the beginning?
The Greek crisis could be the beginning of a far bigger systemic meltdown. Greece has to pay a crippling price for the credit it needs to fund its sovereign debt. Greece is paying that 7% on 10 year borrowings of 20bn euros ($26.7bn; £17.5bn) of debt due for repayment over the next two months, as opposed to Germany which pays just 3%. Buoyed by a cyclical recovery, markets around the world have yet to recognise the complexity of this situation. When they do, it will also become apparent that Greece is part of a wider, and historically unfamiliar phenomenon - that of a simultaneous and large disruption to the balance sheet of many industrial countries. Tighten your seat belts.

The Euro would be a big loser in this situation. But I think also that this scenario is likely. Diversifying in US dollar assets could be an option for European investors. A flight to safety toward the US dollar could occur, although in the longer term also the sovereign debt situation of the US is a time bomb.
US Dollar Is To Gain Strength

In the shorter term, the EURUSD chart display how prices are finally testing the 1.33 level. A breakout would project prices toward 1.30. In the daily and 60 minutes time frame, however there are positive divergences of indicators.