Buba Chief Aids Euro

The euro took heart on Friday from comments by Bundesbank President Ernst Welteke that foreign exchange intervention to support the currency could not be ruled out, but halted ahead of a technical barrier against the dollar. Welteke was quoted in Germany's Bild newspaper as saying the euro's weakness was grounds for concern that "bothers us each day" and repeated that the euro was 20-30 percent undervalued.

Analysts remained cautious about the recovery of the currency, saying it had yet to breach key chart resistance at $0.92 and until that happened any change in the fortunes of the euro was not convincing. "The comments encouraged anybody short (of euros) to cover their positions," said Chris Iggo, currency strategist at Barclays Capital in London.