The euro was firmer against the US dollar in early afternoon trade here, with investors in Asia opting to lock in profits after pushing the single currency to nine-month lows, dealers said. Dealers said a flurry of euro bids involving option plays near the 1.20 usd mark supported the European currency. But the euro's gains may be short-lived, with many expecting the currency to eventually head below the 1.20 usd level amid a weak economic and political outlook for Europe. "The market is flooded with factors negative for the euro. No one wants to hold or buy the single currency now," said Harry Ida, senior currency analyst at IFR Forex Watch, a unit of Thomson Financial. Ida said the euro's sharp fall recently has been driven mainly by three factors, namely, the weak economic forecast for Europe, political uncertainty after the French and Dutch rejected the proposed EU Constitution and a widening gap in yields between the US and eurozone. Overnight, German Deputy Finance Minister Caio Koch-Weser said there is still considerable uncertainty about the eurozone economy. Global investors are also becoming more pessimistic about the euro, with a net 30 pct of fund managers now believing the euro is overvalued, compared to 35 pct in May, according to Merrill Lynch's fund managers survey for June. Analysts also attributed the dollar's strength to an assertion by former Federal Reserve Board vice chairman Alan Blinder that he will be surprised if the Fed stops raising the federal funds rate before it reaches 4 pct. Dealers will be setting their sights on a raft of US data due later today including the latest consumer price index, the US Treasury capital inflows data, industrial production and the Fed's Beige Book.