The widening gap between European and US government bond yields caused eurno to drop to 1.1999, a 3.5-week low against the US Dollar.

MUFG Bank analysts pointed out that the Fed's assessment that it is more tolerant of rising bond yields than the ECB may have contributed to widening the gap between bond yields.

"Yesterday's sharp depreciation of German and Italian government bonds gave more support to the US dollar in the short term," analysts commented. Euro / Dollar is currently trading at 1.20122 with a 0.26 percent loss compared to yesterday.