The euro held today near the previous session's four-year highs against the dollar that were set after the Federal Reserve warned of risks to the US economy from falling inflation.
The Fed left interest rates unchanged as expected at yesterday's policy-setting meeting but said that the small threat of too-slow inflation mean that "the balance of risks...is weighted toward weakness over the foreseeable future".
This raised expectations of a US rate cut from present levels of 1.25 per cent as early as June, damaging the dollar's yield attraction further. US Treasury Secretary Mr John Snow later stepped in with comments backing a strong dollar, which gave it only slight support.
By 9.06 a.m. the dollar was trading at $1.1401 per euro, about half a cent up from yesterday's four-year low.
Against the yen it was at 117.57 yen, holding just above the previous session's eight-week low. It was also holding above Tuesday's four-year low against the Swiss franc.
Mr Snow reiterated the standard policy that a strong dollar "is in the US interest". He said the way to achieve this is to work on the fundamentals of the economy.
Mr Snow's comments are also competing with those of European officials, who also have been supportive of the recent strength in the single currency.
The latest of these came from European Central Bank Governing Council member Mr Ernst Welteke, who said the rising euro was not holding back growth in Europe and is no cause for concern.
The ECB is expected to leave rates unchanged at 2.5 per cent when it holds a policy setting meeting tomorrow.