The euro has been gaining only modestly over the last several trading days as Middle East turmoil puts risk appetite in the region on unstable ground. The 17-nation common currency has undergone a gradual ascent versus the US dollar as investors have moved away from safe-havens and into the higher-yielding assets of European and Pacific currencies.

Against the dollar, the EUR has moved up from the low of 1.2873 touched on January 10 to as high as 1.3860 yesterday. However, yesterday's flare-up in Egypt between forces supporting president Mubarak and those calling for his ouster added to a rising atmosphere of uncertainty in the region which pulled some investors away from their recent risk-taking.

With the European Central Bank (ECB) announcing its latest decision on short-term interest rates today, there is a good chance that the EUR will receive additional volatility than is commonly experienced. The continued unrest across the Middle East also adds to the tug-of-war between market optimists and market pessimists. The direction of the euro is unclear for today, but traders should expect wide swings in value as global events play out and affect risk appetite.