The euro stood at $1.2534, down slightly on the back of uncertainty surrounding Greece and Spain.
The currency fell back earlier this morning following the release of German import price inflation figures, which showed that inflation had slowed for the seventh consecutive month to 2.3% in April, from 3.1% in March.
Spain continued to dominate news in the euro region, with Spanish PM Rajoy yesterday calling for a show of force from European authorities as his government sought ways to avoid tapping markets to fund the bailout of Bankia.
'Europe has to dissipate any doubts about the euro,' the premier told a hastily-called news conference in Madrid yesterday. It 'must affirm that the euro is an irreversible project and act in consequence.'
However today, Rajoy insisted that Spain won't ask for EU funds, even as the €19 billion bailout of lender Bankia has sparked concerns about how much bad debt is held by other Spanish banks.
Meanwhile worries about Greece have subsided a little, at least for now, after the latest polls showed the pro-bailout conservatives, New Democracy, have taken the lead. We could see a relief rally for the euro if the Greek population elects pro-bailout parties into office.
From a technical perspective, the upside for the common currency is limited ahead of the Greek elections on 17 June. There was strong resistance at the $1.2670 level, with some support at $1.25. If EUR/USD breaks through $1.25, it might approach the $1.22 level not seen since June 2010.