The weakening of the euro vis-à-vis the dollar during January and February was mainly attributable to a series of economic data releases over this period, which were mostly relatively favourable as far as the US economy was concerned. The US economy surprised commentators with very positive data on employment and output. Over the same period data releases for the euro area were more muted.
It appears, therefore, that the recent developments of the euro exchange rate primarily reflect the previously unexpected strength of the US economy. Therefore, the recent fluctuations of the euro exchange rate should not be considered overly dramatic.