The euro has gained over 11 percent since hitting a 4-month low of $1.286 in January and while median forecasts from the 66 strategists in the poll did not see it sinking that low again in the next 12 months, there was a wide range of views.

The common currency is seen at $1.42 in one month, $1.39 in six and $1.36 in a year according to the poll taken this week, a slightly stronger outlook than results in a poll taken in early March.

Forecasts for the 12-month outlook ranged from $1.15 to $2.50, highlighting an uncertain outlook for the euro.

The euro is seen as the most volatile of the major currency pairs this month, with the poll implying the highest volatility since late 2010 of 16.8 percent. Analysts say the divergence of forecasts in Reuters currency polls offers a leading indicator of exchange rate volatility in the following month.

But expectations for an interest rate hike by the ECB this week have helped push the euro to a 14-month high of around 1.43, despite concerns that Portugal will have to seek a bailout from the European Union.

The ECB is widely seen raising interest rates by 25 basis points from their record low of 1 percent when it meets on Thursday, and following that with similar hikes each quarter through to next year. The US Federal Reserve is not seen tightening policy until early 2012.

“Markets have already priced in 75 basis points of rate hikes by the ECB, suggesting little scope for more EUR upside,” said Mitul Kotecha at CA-CIB, the most accurate forecaster in Reuters forex polls so far this year. “Unless there is a sharp improvement in sentiment toward the euro zone periphery, EUR will likely face growing pressure.”

The euro zone economy grew 0.3 percent in the fourth quarter of 2010 and is expected to have expanded 0.5 percent in the first three months of this year, but data indicates a strong German economy is masking continued weakness in periphery members of the 17-nation bloc.

Growth in the US service sector slowed last month, data showed on Tuesday, strengthening the case of some top Fed officials who argue the economy is not yet strong enough to warrant removing the massive support provided by its central bank.

The euro will weaken against the pound over the next 12 months as the Bank of England embarks on its own monetary tightening regime, battling to control inflation running at more than twice its 2 percent target.

The common currency was seen worth 87.7 pence in one month, 85.5p in six months and 84.1p in 12. The respective forecasts in the March poll were for 84.8p, 83.3p and 82.6p.

“With inflation running well above the upper band, and expected to push higher, we believe the BoE could become more hawkish in its rhetoric, flattening the curve and strengthening the currency,” said Meng Xiao at BofAML.