The euro firmed against the dollar this morning as investors squared positions built up in the US currency's recent surge. However, analysts predicted only a temporary respite for the struggling single European currency, which last week fell to a near nine-month low of 1.2160 usd after France and the Netherlands voted against the proposed EU constitution. The underlying support for the dollar was evident last Friday when the euro failed to capitalise on a weaker than expected US payrolls report for May. Non-farm payrolls rose just 78,000 in May, the lowest since August 2003 and way below forecasts of a 186,000 improvement. Hans Redeker, global head of FX strategy at BNP Paribas, expects Europe to dominate currency market sentiment until the June 16-17 EU summit, especially as the UK is poised to put its plan for a referendum on hold just as German Chancellor Gerhard Schroeder and French President Jacques Chirac have urged countries to continue with the ratification process. "Thus, we expect the political debate over the future of Europe to continue to weigh on the euro up until the summit," he said. In addition, the euro has suffered as investors have placed greater importance on developments related to interest rate differentials than structural concerns relating to the US twin deficits.