The euro pared losses against the dollar on Thursday after the International Energy Agency said it would release 60 million barrels of oil stocks, though traders said the dollar looked likely to hold its gains in the short run.

 The euro rose to $1.4180 EUR from around $1.4155 but was still down 1.3 percent on the day.

 The U.S. Department of Energy said it would contribute to the oil stock release to make up for the loss of supply from Libya and other countries.

 "It could be a signal of the overall level of concern about a slower global economy," said Omer Esiner of Commonwealth Foreign Exchange.

 "We're seeing the euro pare some losses, but in the long run, if anything, lower oil prices should be a euro negative as it has been energy and food prices that are driving euro zone inflation," he added. "This may be a knee-jerk, risk-positive reaction." more

The euro rose on Tuesday as investors bet Greek Prime Minister George Papandreou would survive a confidence vote crucial in helping the country avert a debt default.

 Traders were wary of holding short euro positions going into the parliamentary vote due later in the day, and analysts saw only short-lived boost if it is passed as Greece must also vote on new austerity measures on June 28.

 The euro EUR was up 0.3 percent at $1.4355, with offers reported around $1.4380-85. It was expected to face stiff resistance ahead of $1.4500, with the 55-day moving average around $1.4411 ahead of the June 15 high at $1.4451.

 The euro trimmed gains after a survey showed German investors in June took their most bearish view about the euro zone's largest economy in over two years, hurt by the Greek debt crisis and indicators of softer activity ahead

 "We should see cautious trading ahead of the Greek vote and if it is passed euro/dollar should react positively," said Roberto Mialich, currency strategist at Unicredit in Milan, who expected gains to be capped below $1.4450. more

The euro extended losses against the U.S. dollar on Thursday after European Central Bank President Jean-Claude Trichet said "strong vigilance" is warranted to curb inflation.

 Market participants, however, said the euro fell because a July rate hike has already been priced in and investors are now taking profits on the currency's gains racked up ahead of Trichet's comments.

 The euro hit a session low at $1.44788 on trading platform EBS and was last at $1.44880, down 0.6 percent on the day.

 For the past few years, investors have come to view the words "strong vigilance" as Trichet's way of signaling an impending rate hike the following month. more