The EUR pared some gains against the U.S dollar on Wednesday after data showed tame underlying U.S. inflation and a decline in housing starts last month, suggesting a U.S. recovery will be a slow one.

Slow economic growth in the U.S could stall a global recovery, and that can prompt investors to pare risky trades in higher-yielding currencies and assets. The European currency dipped briefly to $1.4839 from about $1.4850, though it remained 0.5% firmer on the day on the view that U.S. Interest Rates will remain low into 2010.

The British pound depreciated for the first time in 5 days against the EUR, weakening 1% to 89.38 pence. The Pound also dropped vs. the U.S dollar 0.4% to $1.6744 today.
The Sterling fell for a 3rd day versus the U.S dollar after the Daily Telegraph said U.K. lenders are in a worse state than those elsewhere, citing the world's largest credit-checking company.