The euro held its value yesterday despite Denmark's rejection of the single currency. However, analysts warned that it could fall again after recent intervention by the world's major central banks to boost its value begins to lose its impact.
The market had largely expected a No vote by the Danes and the majority of traders had priced the result into their positions on the basis of opinion polls showing Denmark heading for a rejection of the currency.
The impact of the No vote is expected to be longer term. According to Mr Trevor Greetham, economist at Merrill Lynch, the negative vote could delay EU enlargement and will make the ultimate UK membership of monetary union less likely.
The euro came under some initial minor selling pressure in New York and was pushed to around $0.8751, just above the level where intervention last materialised.
But with the threat of further intervention remaining in the background, the sell-off was limited and it closed at $0.8828.
However, analysts warned that if more intervention does not appear the markets may test the resolve of the European Central Bank and push the euro lower.
"Clearly this is not going to help the euro in the long run," said Mr Eric Robin, head of foreign exchange sales at Lehman Brothers International.
"There is still this perception in the market that if the euro is going to stay strong, it needs to include strong economies," Mr Robin added.
While neither Britain nor Sweden has said when they will hold referendums, the Danish vote will probably deter the British Prime Minister, Mr Tony Blair, and the Swedish Prime Minister, Mr Goeran Persson, from campaigning to scrap the pound and the krone, analysts said. Opinion polls in both countries show a majority favour keeping their national currencies.