European Central Bank policymakers have been relaxed about the euro's steep rise against the dollar -- in public at least -- but its move towards $1.50 is raising the prospect that it might intervene.
The 31 analysts surveyed by Reuters as part of the monthly foreign exchange poll forecast a one-in-five chance the ECB will intervene directly in the market either on its own or in cooperation with other central banks within the next 12 months to sell euros and buy dollars.
The last time the ECB entered the foreign exchange market was in 2000 when it acted with the U.S. Federal Reserve and the Bank of Japan to prop up the euro when it hit a record low at $0.8225. On Wednesday it hit a record high above $1.47.
Apart from the Bank of Japan, which sold some 35 trillion yen for dollars in 2003 and 2004 to stem the yen's appreciation, major central banks have been firmly on the sidelines since 2000.
European politicians have become increasingly vocal about the euro, which is up 11 percent this year and 78 percent from its 2000 low, fearing its strength will squeeze exporters out of global markets.
The ECB has so far given no indication it is about to act, however, not least because U.S. authorities have shown even less inclination to step in. Many analysts feel any ECB action would need the backing of the U.S. Treasury and Federal Reserve.
"It (the euro) is edging back into the consciousness of the ECB and the more it rises above current levels it will become even more of an issue," said Kevin Grice, senior economist at American Express Bank which forecast a 40 percent chance of intervention.
The euro's relatively gradual appreciation has helped prevent calls for immediate intervention but a sharp move could prompt the ECB to jump in.
There are growing concerns that the dollar's slide is now becoming disorderly, with implied volatilities at 8.5 percent, their highest since mid-August and on track for their biggest weekly rise since November last year in percentage and nominal terms.
"If there is a big move in a day it will put pressure on policymakers to act to ensure orderly markets," Grice said.
The other major factor enabling the ECB to fend off calls for intervention is the good health of the euro zone economy. But any signs that European companies are suffering from a tougher export environment will crank up the pressure on the central bank to act.
The euro zone economy has been performing well, enabling the ECB to argue that the euro's strength has not been a problem but if data starts to turn consistently negative it may be forced to act.
"There's been an incredible rise in the euro," said Daragh Maher, senior currency strategist at Calyon, which said there was a 30 percent probability of intervention. "Corporates hedged at lower levels will start to feel the pain when these hedges run out and there's already been a dip in business sentiment."
However some analysts are more sceptical that the ECB is gearing up to intervene, in part because they doubt it will have the desired effect.
"Empirical research on interventions confirms their rather modest effectiveness, they seem to influence the exchange rate at best on a very short horizon," said Michael Schubert, senior economist at Commerzbank in Frankfurt.
"Consequently, every intervention constitutes a high risk that the ECB will lose some credibility in case the desired effect on the exchange rate does not unfold."