Daphne? F...iddlesticks. Eward knew Daphne had an idea of their relationship; as she had told him of Katherine's affection during the ball he had an incling that Katherine had told Daphne of their encounters. Though she probably thought they were still strictly not speaking, only coming into contact when they wished to... well... Daphne probably knew.
Eward squeezed Katherine's hand in similar assurance. He did not want her to panic and he placed his other hand on Katherine's waist. "Daphne... we had not wanted to disturb the gathering, Katherine wished for some air. I hope you do not think we were avoiding anything.."