After a downward turn against the USD, the EUR rebounded from its session low of $1.3914 and trimmed its losses following a rise in the equity markets. Wednesday the EUR ended at $1.3987, down from $1.4075 late Tuesday and at 137.47 Yen, up from 137.10. The Pound Sterling was at $1.6355, up from $1.6333. The Pound advanced against the EUR to the highest level since December after a government report showed manufacturing in the U.K. expanded for a second consecutive month and stocks gained.
The EUR/USD pair seems to have settled into a trading range with the EUR fluctuating between $1.38 and $1.42. This trend is likely to continue until the end of the week. However, with high oil prices and diminishing risk aversion it is likely that the EUR will resume its bullish trend as the underlying sentiment is still negative for the Dollar.
With a slow news days for the Euro-Zone today and Friday, investors are waiting for the weekend G8 meeting to start this Friday for a better assessment of the direction the participating economies will take. The EUR's recent strength makes it a excellent forerunner in today's market, but regional uncertainties have captivated traders lately and made the forex market less predictable.