By: Barbara Zigah

As the markets anticipate that the ECB will move to widen the rate differential between it and the Federal Reserve, the Euro continues to struggle to regain some of last week’s momentum. In Asian trading today, the Euro hovered near a 1-week trough against the U.S. Dollar and is trading within a relatively tight band. The Eurozone’s peripheral debt problems still weigh heavily on the common currency, even as bankers from Germany and France meet to work out details which would not trigger a default call from the credit reporting agencies.

As reported at 12:13 p.m. (JST) in Tokyo, the Euro was trading at $1.4335, after falling to a low of $1.4283 in the overnight trading hours. Most recently, the EUR/USD pair was flirting with positive territory at $1.4319.

If the ECB president’s statements during the press conference which follows the policy setting meeting are in any way more dovish than previous ones, the Euro will likely see a wide sell-off, as the only support it’s currently receiving is from speculation of a rate hike. Nonetheless, most analysts don’t believe that the Euro can see any appreciable decline over the next months, since the rate differential is supportive of the Euro.