By: Barbara Zigah

In spite of reassurances from Germany’s Angela Merkel and France’s Nicolas Sarkozy that the troubled Greek nation would remain a Eurozone member, the common currency is under pressure in Asia. What has resurfaced with a vengeance is investor skepticism that Greece can avoid a default. Indeed, the highly turbulent situation has brought U.S. Secretary Treasurer Timothy Geithner to the Eurozone, where he will take the unusual step of attending the Eurozone meeting of finance ministers.

As reported at 1:24 p.m. (JST) in Tokyo, the Euro slipped against the U.S. Dollar trading 0.2% lower to $1.3768, off the $1.3784 high struck yesterday just after the release of a joint statement from the German and French heads of state. One Forex strategist in Tokyo said that Germany’s inclusion in the joint statement went a long way to easing investor fears that the German government was not committed to the Euro. However, without any thing else positive coming out of the meeting, he believes that investors have no reason to buy into the Euro and expects the common currency to test the recently struck 7-month low.

Also pressuring the common currency is the prospect of a downgrade of Italian debt later today, as the 90-day deadline issued by Moody’s Investor Service is now approaching. In June, Moody’s said that it was possible that they would cut Italy’s current rating from Aa2.