Analyst: Trade uncertainty curbs euro volatility.

Foreign exchange analysts say that on the surface, the European Central Bank's downward revision of inflation expectations may trigger a more intense foreign exchange reaction. However, the lingering trade uncertainty and the recent breakdown of the correlation between the euro and interest rates have largely restrained the euro. Nevertheless, the euro is once again testing daily highs, which is a subtle signal that even in a low volatility environment, traders may still lean towards long positions.