The EUR and other higher yielding currencies declined Thursday as weakening confidence about the global economic recovery prompted investors to turn to the Dollar and Yen for safety. Disappointing U.S economic data as well as steep drop in equities triggered a decline in demand for risk. Signals from world leaders regarding a more restrictive official stance toward capital flows and currency volatility also contributed to investors' risk aversion. The EUR was at $1.4910 from $1.4960 late Wednesday and at Y132.54 from Y133.73. The Pound was at $1.6651 from $1.6740.

The EUR is struggling to rise above $1.50 and is mainly caught between $1.48 and $1.50 trading levels. Further caution arises from ambivalent signals coming from Federal Reserve speakers about the possible timing of interest-rate hikes as well as the Fed's attitude toward the weakening Dollar.