There has been a stabilisation in Euro-zone sentiment which will help underpin the Euro in the near term. Overall confidence in the US economy will also remain fragile with fears that growth will not be strong enough to alleviate serious budget stresses. The dollar will, therefore, not be in a position to gain strong backing as yield support will be weaker in the short term. Conditions within the global economy will be watched very closely and the dollar will tend to lose support if there is a sustained improvement in confidence surrounding risk appetite. Nevertheless, there are still very important risks which should limit potential selling pressure on the dollar. Overall there will be market attempts to push the Euro stronger and a move to the 1.30 area is certainly a realistic possibility this month. Nevertheless, the net risks make Euro buying unattractive above 1.2740 looking at the next 24 hours.