The euro has dominated the markets in the last day following hints from the ECB that EU interest rates could rise in April.
ECB President Jean-Claude Trichet has announced that interest rates will remain at 1.0% this month, but could increase in April.
The US dollar has continued to fall in the last day as the markets react to the situation in Libya.
The ECB is set to release its latest interest rate decision this afternoon, and the markets are hoping for an increase. But is this in fact likely?
The US dollar held ground on Tuesday in spite of strong data from Europe and the UK.
The US dollar lost to sterling and the euro on Monday as the markets continue to seek alternative havens on unrest in Libya.
The euro has fallen this morning on reports that EMU core inflation dropped -0.1% to 2.3% in January.
Sterling dropped on Friday as new estimates revealed the UK economy shrank more than believed in the last quarter of 2010.
The British economy contracted more than previously thought in Q4 2010 according to data released this morning.
The euro has benefited from tensions in Libya in the last day as the markets seek a safe haven.