There has been a significant shift in ECB rhetoric this week which has undermined the Euro. Today, ECB member Mersch stated that the downside risks to the Euro-zone economy had increased and that the 2008 GDP forecasts may be revised lower. He also stated that the ECB should be cautious given the uncertainties which will curb expectations of higher Euro interest rates. Despite the major US concerns, the Euro fundamentals increasingly do not look strong enough to justify levels above 1.49 against the dollar with a move back to 1.45 now on the cards (full story)