The euro dollar exchange rate is 0.014% higher on the day with 1 EUR = 1.4161 USD at 9AM in London. The euro pound exchange rate is 0.260% higher with 1 EUR = 0.8696 GBP. The euro is holding its ground this morning in highly uncertain markets. Yesterday we saw how unimpressed global market were by Trichet’s comments and the euro dollar exchange rate fell by almost two cents. As widely expected, the ECB left the refi rate at 1.50%. During the press conference, President Trichet sounded more cautious on growth conditions. He said downside risks to growth may have intensified and that global pressures may spill over into the Eurozone. With respect to recent data, he noted that there was some deceleration in the pace of economic growth over the past few months, and that uncertainty is particularly high with respect to growth prospects. "Given Trichet’s more cautious economic assessment, we see little scope for rate hikes anytime soon, though he reminded that inflation risk remains on the upside," says a note from the currency analyst team at UBS. Extra liquidity and Irish/Portuguese bond-buying intensified contagion fears yesterday, and many will be concerned that the ECB is unwilling to buy Italian and Spanish bonds. Yields in these two countries continued to rise yesterday. Major falls in commodity and equity indices have reinstated the traditional dollar safe-haven flow. This pair is trading at $1.4150 and whilst a dip below $1.40 seems justified in the current environment, Asian sovereigns continue to support the single currency. Last Updated ( Friday, 05 August 2011 09:04 )

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