The euro continues to struggle in forex trading on the currency market as the problems in Greece continue weighing on the euro zone. European Union leaders remain divided on the best way to approach the Greek problem, with some -- especially Germany -- reluctant to bail Greece out.

However, Greece has been arguing that it has adopted austerity measures, and tried to work through the mess. However, the bonds it is selling on the market to roll over debt have prohibitively high interest rates, and that is adding further to the burden. Some are saying that the IMF could be a solution, but that could actually threaten the euro zone's monetary sovereignty, proving in some minds that such a Union was foolhardy to begin with.

Another issue is that turning to the IMF, with the European Union unable to solve its own problems, could lead to a chain reaction of southern European countries (including Portugal, which is also on the brink), effectively ending the monetary union. GFT's Boris Schlossberg reports on the problem in FX360:

The Greek issue continues to hover over the EUR/USD like a dark cloud. If the EU is unable to find a pan-European solution to resolve the crisis, the currency could weaken further on fears that many of the other Southern European economies may be next as risk of fragmentation increases exponentially.

The U.S. dollar, on the other hand, is doing reasonably well, thanks to indications that things are improving as the job market stabilizes.

See Also

• Euro in Forex Trading
  Forex trading on the currency market