Euro Recovers From Multi-Month Low Against Dollar But Momentum Fades

Euro loses steam during the European hours on Thursday after having recovered significantly from a five and half month low against the dollar earlier in the week. Pull back in dollar index futures from recent rally supported the single common currency. Possibility of a near term rate cut by ECB is adding pressure on the euro although European Central Bank President Christine Lagarde hinted on Wednesday that it was too early for the ECB to review its 2% inflation target because its fight to rein in price growth was not over yet. This could keep the euro supported. EURUSD is currently trading at $1.0698, almost flat on the day after having hit a low of $1.0629 this week. Meanwhile, data today showed Euro area current account surplus decreased to a 3-month low in February. The current account surplus dropped to EUR 29.0 billion in February from EUR 39.0 billion in January. This was the lowest surplus since November last year.

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