Further downward pressure on euro is likely

Narrow trading ranges have been a key feature of currency markets in the opening five months of 2014. The euro to dollar rate has been confined to a $1.35-1.40 range year-to-date.

Meanwhile, euro to sterling had been very range bound, trading between 82-84p, until it moved down to around the 81p level in the past couple of weeks.

Sterling has also been range bound against the dollar, trading between $1.64-1.70 year-to-date. Even the yen has been much more stable this year, largely trading around the ¥102 level versus the dollar.