Euro rebound expected to be short-lived

THE euro, which hit new four-year lows on Wednesday, rebounded yesterday as speculators were forced to sell the currency on the back of strong gains.

The currency fell to a low of $1.2144 on May 19, and has gained 1.4% against the dollar this week, its biggest gain since the five days ending 11 September 2009.

Some economists expect the gain will be short- lived and that the scramble in Europe to protect the weaker economies will slow economic recovery, leading to further euro weakness.