Analysts said comments in recent days had fuelled talk the European Central Bank might intervene for the first time to support the euro, but they said the timing was not necessarily right on Wednesday.

"Intervention is a possibility, but the timing is really crucial," said Fabio Fraschetti, currency analyst at Banca Nazionale del Lavoro in London. "It's more effective when the euro is going up, and because the market is expecting it today, its effect would be neutralised," he added.

The euro was trading around $0.9055 at 0715 GMT, down from earlier one-week highs of $0.9087. The euro was also around half a yen below earlier one-week high against the yen, trading around 99 yen. Intervention was on everyone's lips after French Finance Minister Laurent Fabius made aggressive use of the word on Tuesday to support his conviction that the euro would soon find a level more in line with fundamentals.

German Prime Minister Gerhard Schroeder said on Wednesday he believed the euro was undervalued, and he was sure this would change. German exports, however, jumped 21.1 per cent in March from a year ago, benefitting from the weakness of the single currency.

German wholesale sales were down a real 1.8 percent year-on-year, but up a nominal 4 percent. The frisson of intervention fear was amplified by rumours in New York that the Financial Times newspaper would carry a report claiming the United States was ready, if asked, to join concerted intervention. But dealers said the actual article, entitled "Is Europe misinterpreting signals from Washington", was not nearly as strong as speculation had suggested. The report claimed no inside knowledge of the US position, quoted no sources and merely noted that the United States had intervened to correct sharp movements in currencies before, with the most recent cases in 1995 and 1998.

"We can't see why the US would have any interest in pushing the dollar lower, but we're also short (of the euro) so you have to be nervous," said a US bank dealer in Tokyo.

The euro's cause was aided on Wednesday by demand against the yen, said to be related to NTT Docomo's purchase of a 15 percent stake in Dutch firm KPN Mobile for five billion euros.

Its parent company, Nippon Telegraph and Telephone Corp, has this week paid $5.5 billion for a US Internet company and there was speculation it would join KPN in a joint bid for UK mobile group Orange Plc.