The euro eased from a four-and-a-half month high against the dollar on Thursday as appetite for the single currency weakened, amid renewed concerns over debt problems in Portugal.
The EUR/USD pair retreated to $1.4186 in early Asian trade, off Tuesday's high of $1.4249.
The euro weakened on speculation that Portugal’s minority government may collapse today, as the country’s parliament votes on budget cuts that have divided lawmakers.
The Portugal situation has put a spanner in the (euro's rally) with the suggestion the government may fail today, and the implication would be the resulting uncertainty would push the country towards a bailout, Reuters reported, quoting Robert Ryan, senior G10 currency strategist at BNP Paribas in Singapore.
The single currency has gained nearly 6 percent against the greenback so far this year. The pair is likely to find support at 1.3977, a low reached on last Thursday, and resistance at Tuesday’s high of 1.4248.
Analysts expect euro to climb higher in the coming months, as current levels offered a good chance to book profits.