By: Barbara Zigah

Ahead of today’s policy setting meeting of the European Central Bank, the common currency managed to recoup earlier losses against the U.S. Dollar. Most analysts expect that the central bank will set the stage for a July rate hike using rising inflationary pressures as the justification. For the most part, markets have already priced in such a scenario but some analysts expect that the actual confirmation might push the EUR/USD pair beyond the $1.4700 resistance level.

As reported at 3:11 pm. (JST) in Tokyo, the Euro was trading against the U.S. Dollar at $1.4625, a gain of 0.3%. The Euro also gained against the Japanese Yen, rising 0.7% to 117.33 Yen. One market player commented that the ECB President has been known to surprise on occasion, which has resulted in some investors cutting their long Euro positions during the Asian session.

And still putting pressure on the Euro is concerns over Greek debt. Reuters reported that the next tranche of Greek aid would be delayed until the Greek government corrects their plan to meet 2012 financing needs.

However, continued weakness in the U.S. economy is giving some support to the Euro. The release of the Federal Reserve beige book yesterday confirmed that May’s slowdown of the economy was attributed to a disruption of the Japanese supply chain following the March earthquake and higher gasoline prices, a result of the continued violence in the oil producing nations of the Middle East and Northern Africa