The dollar failed to take advantage of solid US data overnight, allowing the euro to push towards USD1.09 again. Stronger US consumer confidence and durable goods orders data underpinned expectations that the economic recovery is gathering momentum, but analysts said sentiment alone can only do so much for the dollar, which has already knocked the euro down by more than 5pc in the past three weeks. "A lot of good news has already been built into the dollar, making it more difficult to establish gains on each individual data release," said Geraldine Concagh, senior economist at AIB Treasury. At 0915, the euro was trading at USD1.0864 and 69.30p sterling.
Niall Dunne at Ulster Bank pointed out that a lot of the dollar's recent gains have been in made in anticipation of a stronger than expected recovery. But if the initial spurt of growth, fuelled by tax rebates and historically low interest rates, gives way to a protracted period of slower and more sustainable growth, then the dollar can be expected to weaken again, he said. Dunne has forecast that the euro will end the year closer to USD1.15 than USD1.05, even though US growth will probably outpace Europe this year. //www.fxcentre.com