Euro Recovers with No Help from Fundamentals

The general market sentiment and domestic fundamentals were not supportive for the euro at all. And this makes it very surprising to see the shared 18-nation currency relatively strong today, rising against some of its major peers.
The market sentiment was in a risk-off mode, favoring safer currencies as a result. This made the euro lose versus the yen, but did not prevent it to gain on such majors as the Great Britain pound and even the US dollar, which is considered to be a safe asset.
The Bundesbank released its monthly report today, demonstrating a fairly positive view on the German economy but warning that growth momentum may weaken in the second quarter of this year. The central bank talked about external risks to economic expansion:

The potential for external disruptions has recently increased significantly owing to the greater perception of economic risks in a number of emerging markets and the considerable geopolitical uncertainties in eastern Europe.

Moreover, the bank attributed the strong growth at the start of year to rather mild winter, meaning that it will be hard to maintain the pace of expansion. The report cautioned:

Because the positive effect of the mild winter in the first quarter will statistically dampen the seasonally adjusted growth rate in the second quarter, GDP growth is likely to be comparatively low in the second quarter after seasonal and calendar adjustment.

Such outlook is not particularly helpful for the euro.
EUR/JPY went down from 139.03 to 138.84 as of 17:02 GMT today. At the same time, EUR/USD rallied from 1.3692 to 1.3710, reaching the high of 1.3733, and EUR/GBP advanced from 0.8142 to 0.8152.

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