The euro may rise in Asia after European Central Bank President Jean-Claude Trichet yesterday indicated the bank had not sold its currency to stem gains that threaten the region's growth
Published:
17 February 2004 y., Tuesday
Trichet also said interest rates are ``historically low,'' suggesting the bank will ignore calls to halt the euro's one-year, 18 percent gain versus the dollar by cutting its benchmark rate, which is twice that of the Federal Reserve's. Europe's common currency fell by the most in more than two weeks on Friday on speculation the ECB sold.
``On the day the ECB does intervene, we're not going to be scrambling around to find out if it happened; Trichet made that clear,'' said Robert Rennie, currency strategist in Sydney at Westpac Banking Corp. ``Until then, the market will continue to test the ECB's pain threshold.''
Europe's common currency was little changed at $1.2767 at 10:20 a.m. in Tokyo, from $1.2771 late yesterday in New York, according to EBS prices. Against the yen, it bought 134.66 from 134.71.
Asked about the euro's rally during testimony yesterday to the European Parliament, Trichet cited a Group of Seven statement from Feb. 7 criticizing ``excess volatility'' in the currency markets. Regarding speculation the ECB would sell the euro, he said, ``when we have something to say, we say it.''
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Bloomberg
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