The euro rose on Wednesday as investors bought it back after steep falls against the dollar and yen this week, but the market struggled for clear direction as it tried to decide if a dollar recovery had run its course.
But with a question over its reserve currency status resurfacing on Tuesday, analysts said the market was not sure which direction to head.
The dollar has fallen against major currencies such as the euro and Australian dollar on the currency market this year, with investors unwinding safe-haven dollar positions as the worst of the economic crisis faded and as questions arose over its suitability as the world's main reserve currency.
Both it and the yen have clawed back some lost ground this month as investors have paused to assess whether rallies in riskier assets including shares have got ahead of themselves.
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