Sarkozy Pledges to Defend Euro

On Friday, French President Nicolas Sarkozy stated that his country would support the euro currency and oppose "any kind" of debt restructuring, according to Reuters. Sarkozy and German Chanellor Angela Merkel met to discuss the future of the euro zone. Sarkozy described their views as being in complete agreement--the euro must be protected. Is Sarkozy expressing a genuine sentiment, or merely posturing for the markets? France's economy is currently growing at a modest pace--not as robust as Germany's, but far from a recession. Thus, Sarkozy may have an interest in maintaing the status quo. But at what cost? On Thursday, the chairman of the Eurogroup, Jean-Claude Juncker, questioned whether or not the IMF would be able to release the next round of financial support for Greece. If the IMF is unable to do so, other European countries--like France--may have to fill the financial void. The euro has fluctuated in value over the month of May--rising and falling against the dollar and other world currencies--seemingly changing in momentum from one day to the next. The euro moved lower against the dollar on Thursday, following Juncker's statements, but moved up on Friday after the statements by Sarkozy. At any rate, traders should approach the euro cautiously given its recent volatility. Traders looking to play a long euro might consider CurrencyShares Euro Trust FXE. FXE attempts to return a value corresponding to the strength of the euro. Traders who do not believe that French resolve will prevent the euro from declining might consider ProShares UltraShort Euro EUO. EUO tries to return the inverse value of the euro.