A week of two halves was initially positive for the euro. Investors became steadily more confident that the German parliament would vote in favour of supporting the second bailout for Greece, as proposed at the EU summit meeting in July. On Thursday, the Bundestag duly gave its rubber stamp to the deal, calming fears that a financial meltdown in Europe would tip the world back into recession.

Two days later the Greek prime minister undid all the good work, when he announced that his country would fail to meet one of the salient conditions of that bailout: the budget deficit in 2012 will be 6.8% of GDP, instead of the stipulated 6.5%. There was further damage this Monday morning when the credit rating of Franco-Belgian bank Dexia was downgraded.

This Thursday the euro could take another hit, when ECB president Jean-Claude Trichet gives his final press conference following the monthly council meeting. Although M Trichet's replacement is a well-respected central banker with a reputation for policy toughness, he is an Italian.