The Euro weakened against most of its major counterparts during last week's trading, yet managed to recover most of its losses.

The uncertainty regarding the Euro-Zone continues to grow, as Fitch Ratings cut Spain's credit by one notch to AA+ from AAA. The credit downgrade took place due to concerns that the nation's debt burden will weigh on economic growth. The rating company added that the downgrade reflects Fitch's assessment that the process of adjustment to a lower level of private sector and external indebtedness will materially reduce the rate of growth of the Spanish economy over the medium term. As the uncertainty regarding the Euro-Zone's ability to recover from the debt crisis continues, the Euro is likely to see further devaluation. The uncertainty also leads to risk-aversion in the market, and turns investors to look for safer assets, such as the Dollar and the Yen.

Looking ahead to this week, traders are advised to remain updated on every development regarding the Euro-Zone debt crisis. This is still that most important issue in the market, and every announcement on this matter is likely to have a large impact on the Euro. Traders should also follow the leading economic publications from the Euro-Zone, especially the German indicators.