The euro steadied against the dollar on Wednesday and rebounded from a 16-month trough against the British pound after the Bank of England doused expectations of monetary tightening in the near term.
The euro was also being helped by steady purchases by Asian central banks, which have been actively intervening to curtail the strength of their currencies. Such recycling of foreign exchange reserves by the South Korean and Chinese central banks has underpinned the euro despite growing rate cut expectations.
On Tuesday, the euro was hurt by a media report that the Bundesbank was ready to back a raft of stimulus measures for the euro zone economy if the European Central Bank cuts its own inflation forecasts next week.