LONDON (AFP) - The euro clawed its way back above 1.22 dollars on Tuesday, as dealers shrugged off news that Moodys had slashed Greeces sovereign rating to 'junk status. In afternoon London trade, the European single currency advanced to 1.2286 dollars from 1.2223 dollars in New York late on Monday. Against the Japanese unit, the dollar decreased to 91.17 yen from 91.56 yen. It seems as if investors have quickly shrugged off the debt downgrade of Greece by Moodys to focus on buying opportunities, said Joshua Raymond, market strategist at financial betting firm City Index. International ratings agency Moodys cut its sovereign rating for Greece on Monday, as EU and IMF auditors began taking a hard look at the countrys attempts to slash its debt. The agency said that considerable uncertainty about Greek plans, even with the help of an EU-IMF bailout package, to reduce its huge debt and balance its finances justified the ratings cut by four notches from A3 to Ba1. There has been so much negative comment about the fiscal position of Greece in the past few months that it would be an exaggeration to say that last nights downgrade of Greek debt to junk status by Moodys was a complete surprise, said analyst Jane Foley at online trading site That said, the news serves as a reminder that fears of a Greek default still exist and also of the depth of problems that still face the eurozone. Greek authorities rejected the argument behind Moodys cut, saying the government had taken major steps to balance its books. The European Unions top economic commissioner Olli Rehn has also criticised Moodys for the downgrade. The euro was meanwhile pressured by downbeat economic news in Germany, which is the biggest economy in the eurozone. German investor confidence has plunged this month because of eurozone debt worries and fears that austerity measures will hurt growth, a survey showed Tuesday. The closely watched but volatile financial sector indicator fell by 17.1 points to 28.7 points, well below an average analyst forecast for a drop to 42.5 points, the ZEW economic research institute said. This was the lowest level for the index since April 2009, when it stood at 13 points. In afternoon trading here on Tuesday, the euro was at 1.2286 dollars against 1.2223 dollars on Monday, at 112.02 yen (111.91), 0.8323 pounds (0.8287) and 1.3965 Swiss francs (1.3957). The dollar stood at 91.17 yen (91.56) and 1.1363 Swiss francs (1.1418). The pound was at 1.4761 dollars (1.4742). On the London Bullion Market, the price of gold eased to 1,223 dollars an ounce from 1,223.75 dollars an ounce on Monday.