Just when you thought the euro was safely on an upward trajectory, things are getting interesting again.
Minutes from the Federal Reserve's latest policy meeting, released Wednesday, showed that some policymakers have their doubts about keeping to the current schedule for ending the Fed's bond-buying stimulus efforts. That sent the dollar soaring against any number of currencies, including the euro.
Then there is the Italian election this weekend. Italy does not allow polling this close to voting, but the latest surveys showed former Prime Minister Silvio Berlusconi cutting his chief opponent's lead in half, thanks to stunts like adopting a homeless puppy and sending official-looking mail to Italian voters promising to reimburse payments made under new property-tax laws.
The prospect of the free-spending, freewheeling Berlusconi regaining power has German officials warning of dire economic consequences for Italy, and it's unsettling investors.
Downbeat economic reports from the euro zone are adding to the weight on the euro. The latest Flash Euro Zone Services PMI survey pointed to ongoing weakness overall. And in the north - generally in much better financial shape than the south - France has said it will overshoot its deficit target, and business activity shrank more rapidly than it has in almost the past four years.
In case all that is not enough, Jens Nordvig, global head of FX strategy at Nomura Securities, has been examining capital flows to and from the euro zone, and he says it doesn't look good for the euro. Euro zone-based investors are less worried about a disaster in the currency bloc, so their risk appetite is improving, making them more willing to send money out of the euro zone to countries with rosier growth outlooks - as the chart shows.