Pressure is mounting on the President of the European Central Bank, Jean-Claude Trichet, to act to slow down the soaring euro against the dollar.
Although the euro dropped slightly against the dollar in trading on Wednesday, it continues to hover near record levels and has risen in value by 15 percent in the past four months against the greenback. The majority of analysts are confident that Trichet will leave the bank's interest rates of two percent on hold but his comments today on the euro's strength will be closely followed. Euro zone members have been applying pressure to the ECB president to keep the euro in check. Belgium's Prime Minister Guy Verhofstadt Wednesday went so far as to call for an interest rate cut. In comments published in the Financial Times Deutschland, Verhofstadt said, "interest rate cuts cannot solve all problems but they can help to reduce the large inequalities between the euro and the dollar". It would be "inevitable," he added, for the ECB to consider its interest rates if the euro continues to climb against the dollar. A recent euro poll showed that citizens are increasingly skeptical about their new currency. In the 12-member currency group, 59 percent of people said there were disadvantages to the single currency – a sharp rise from 33 percent in 1999.