The euro came back after a slight wobble earlier as European Central Bank rate setter Jeurgen Stark was reported as saying the central bank is not considering a series of rate rises even though one may well come in July. The news put the euro under pressure but its losses proved fleeting and later it was the dollar which lost some of the gains it garnered in the Asian session. As Benedikt Germanier at UBS pointed out, investors should prepared for more verbal intervention and the comments from the various cental banks -- European Central Bank, Bundesbank and Fed -- should all be closely watched. Germanier believes the euro will rise from current levels. "The ECB is widely expected to deliver a hike July - and may not hesitate to signal more tightening. In contrast, the Fed can only afford to stay hawkish and hope that capitulation in energy and commodity prices can finally anchor inflation expectations," he said. "Rising yield expectations are already tightening monetary conditions and economic data is still softening. Ahead today, the Beige Book is expected to indicate that economic conditions have continued weakening," he said. He sees short-term upside bias for the euro while looking for a gradually stronger dollar in the medium term, as both economic and inflation expectations stabilise. In the meantime, market players have been trying to make sense of the competitive hawkishness adopted by the various central banks. Yesterday, U.S. Fed chief Ben Bernanke painted a somewhat rosy picture of the world's biggest economy, saying that the rise in the country's jobless rate does not signal the start of a recession, and that the risk of one has actually diminished. And, if the economy is on the mend, rate setters will have room to push through rate hikes to fight inflation. After all, Bernanke has already gone on record to express worry about the inflationary impact of a weak dollar. Additionally, there is some nervousness that the upcoming G8 meeting may result in measures to curb both energy prices and dollar weakness.