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Forex pairs in this Article » (Barcelona) - Lee Hardman, FX analyst at the Bank of Tokyo Mitsubishi UFJ notes that the euro is attempting to regain upward momentum following last week's ECB meeting where President Draghi dampened near-term expectations of further rate cuts.

He adds, "The ongoing narrowing of the euro-zone sovereign credit risk premium and paring back of ECB monetary easing expectations has tilted risks to the upside for the euro in the near-term. However upside potential from current levels is likely to prove only modest with weak euro-zone economic fundamentals and building dis-inflationary pressures still likely to place pressure on the ECB to ease further later in 2013."

Hardman feels that the OMT induced calm and also appears to be resulting in some policy complacency, with the FT reporting that the EU is redrafting the plan for bank rescue funding which may damage its ability to break the vicious circle between banks and governments balance sheets.
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