Dovish words from the ECB president dragged the euro lower against the dollar yesterday

Talk of a slow recovery in the eurozone strengthened demand for the dollar yesterday allowing it to recover 0.5% to 1.4618.

  • Support for the single currency was curbed slightly following the words of European Central Bank President Trichet, who spoke yesterday of a slow recovery in the 16-nation region.
  • The governing council of the ECB considers that it would be premature to declare the crisis over, stating that now was not the time to implement an exit strategy.
  • Additionally, analysts have said that on the whole, although the euro / dollar price is biased to the upside in the medium term, the single currency is now being challenged by corrective weakness.
  • The single currency has dipped lower again this morning, currently trading marginally below 1.46, as investors hold off taking positions ahead of important US data this afternoon.
  • There is a consumer sentiment survey out in the US at 15:00BST, which is forecast to reveal improved confidence in the market, which could weaken demand for the dollar.