Germany Slowing Down: Disaster for the Euro?

Germany's Bundesbank said that the German economy was likely to lose some growth momentum over the coming months, according to Bloomberg.

Germany's economy is currently the largest in the Eurozone and represents approximately one-fifth of the entire economy of the European Union--an economy which, altogether, is the largest in the world.

If Germany's economy begins to stagnate, could the euro come under downward pressure?

The euro has been depreciating agains the U.S. dollar for most of May. On Friday, it declined further against the dollar, after rating agency Fitch downgraded Greek debt to a B+.

As Germany is footing much of the bill for the Greek bailout, sluggish growth in the German economy may prevent additional bailout packages from materializing if Greece requires them.

Traders looking to play euro weakness might wish to consider UltraShort Euro ProShares (NYSE: EUO). EUO attempts to return a value in line with the inverse performance of the euro.

If the German economy does slow, as the Bundesbank predicts, it could have a major effect on the euro, providing opportunities to traders.