When Federal Reserve Chairman Ben Bernanke highlighted the possibility of the U. S central bank's dollar funding facility, not lasting forever, the euro slipped across the board on Wednesday. Bernanke, in his speech in Tokyo shared that dollar swap lines. Though, many in the market accept that the funding cushion is momentary, but analysts opined that Bernanke's comments were keeping dislike for risk high and helping to keep opinion negative on the euro.

Ulrich Leuchtmann, currency strategist at Commerzbank in Frankfurt said, “There seems to be skepticism in the market about how long or how large swap facilities will continue to be. The possibility of a test of the downside level in euro/dollar is stronger than a test of the upside”.

The costs for banks to borrow dollars in the interbank market hitting 10-month highs this week have made investors to drive away from risky assets and currencies, towards the relative safety of U. S. dollars.

It is still uncertain that how debt problems in Greece and other euro zone countries will impact the global economy. The euro was under selling pressure due to weak demand at an offer of five-year German Government bonds.

Nomura currency strategist Ned Rumpeltin advised that position adjustments may take the currency as high as $1.26 before it recommences its downtrend towards $1.20.