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Europe

Euro Rise Worries Central Bank

European Central Bank President Jean Claude Trichet has for the first time expressed deep concern about the rapid rise of the euro against the dollar, increasing speculation the ECB may soon intervene.

European Central Bank President Jean Claude Trichet has for the first time expressed deep concern about the rapid rise of the euro against the dollar, increasing speculation as to whether the ECB might intervene in the foreign exchange markets. Speaking after a meeting of central bankers from the developed G10 countries in Basel, Trichet said that the excessive volatility in the exchange rate is "not welcome and not appropriate," describing the dollar's decline as "brutal." The strengthening of the euro against the dollar risks hampering euro zone growth and is increasing pressure in the ECB to cut interest rates. Trichet's remarks, which are very strong compared to his previous more cautious comments, come after the euro was trading at $1.29 in early morning trading on Monday. ( EUobserver.com)