The euro was supported against the dollar as expectations of a rate cut by the European Central Bank diminished further following yesterday's unexpected recovery in German business confidence in April.
At 10.40 a.m. the euro was trading at $1.1876. Yesterday, the Ifo reported that its main index rose to 96.3 in April from 95.4 in March against expectations of a decline to 95.3, raising hopes Germany may not require a monetary stimulus after all.
This afternoon's testimony by ECB president Mr Jean-Claude Trichet to the European Parliament's economic and monetary affairs committee will be closely monitored for any comments about the state of the German recovery, and whether lower borrowing costs will be needed to give it a lift.
By contrast, confidence surrounding the US economy is more solid following a raft of positive data, particularly surrounding the outlook for jobs.
That has led the markets to increasingly price in a US rate rise from the current 46-year lows of 1 per cent, by late summer.