The underlying Euro-zone deterioration will limit the scope for Euro recoveries against the major currencies.

The US currency again tested levels below 1.47 in New York. Crude oil prices reversed early gains following a much higher than expected increase in inventories which helped support the dollar, but it was again unable to sustain the gains and weakened to 1.4820 in Europe on Thursday as pressure for a Euro correction persisted after recent losses.

The German Economics Ministry took a generally downbeat stance on second-half economic prospects in commentary on Wednesday and official German comments were generally downbeat on Thursday.

The Euro-zone PMI data also remained weak on Thursday. The German PMI index for the manufacturing sector dipped to just below the 50.0 level for August while the French data continued to deteriorate. The wider Euro-zone data provided some relief as they were above expectations, although both were still significantly below the 50.0 level while the data also suggested that pricing pressures may have peaked.