The euro was weaker in late trade in London today on the growing view that the European Central Bank might not cut rates next Wednesday, dealers said.
They said an ECB rate cut next week no longer looks a foregone conclusion, and this uncertainty is weighing on the euro.
BNP Paribas currency strategist Mr Ian Stannard said the outlook for the single European is positive. "It stands to gain on two fronts. There will be a flow of investment funds back from Japan now that the year-end deadline is past," he said.
"As well, there's a shift in sentiment towards the US and people are starting to think there will be no quick-fix solution for the downturn."
Dealers said tomorrow's US labour figures will help determine the future direction of the euro.
"What's interesting is that despite doubts over future ECB rate cuts, the euro isn't doing too badly. It's hovering above the key level of 0.8955 and trying to move higher," Mr Stannard said.
AFP