LONDON (AFX) - The euro was slightly stronger in quiet midday trade, with investors looking ahead to the slew of economic data due out of the US this afternoon, dealers said.
They said there were no fundamental reasons for the move and said it could be due to short-covering or bargain hunting.
"There has been no data. We are treading water ahead of the US data," Daragh Maher, senior economist at ING Barings said. "It is a thin market so it is easy to move it. We had a good run up then a sell off over the past day and a half, now it's ticking up again. It could be due to some bargain hunting," he added.
Jane Foley, a currency strategist at Barclays Capital said the Argentinian/emerging market crisis could make the euro more robust over the next couple of weeks but then expects the single currency to move lower as "themes in Europe justify a weaker euro."
"The Italian finance minister yesterday said that the budget deficit would be 2.6 pct of GDP which is negative news due to issuance concerns and indicates a lack of structural reforms," she said. "Fundamentals are still euro negative so when the shake out from the emerging market has run its course, euro-dollar will weaken and perhaps fall as low as 0.80 usd," she added.
Sterling came off earlier lows to trade higher tracking the stronger euro, dealers said.
"Whenever the euro moves higher against the dollar. Sterling tends to strengthen against the dollar as well," Maher at ING Barings.