The European Central Bank holds displeasure with the euro’s rushed rise against the dollar. The bank’s president, Jean-Claude Trichet said,
In the recent period I have observed moves that I would say were undoubtedly sharp and abrupt. And I said already that brutal moves were never welcome.
The European Central Bank is chiefly responsible for fighting inflation and has been caught off guard by a recent jump that might otherwise prompt it to increase interest rates to contain the trend.
Julian Callow, chief Europe economist at Barclays Capital in London said,
What will matter is future volatility. You can only appraise verbal intervention over months.
Coming at a time when the Federal Reserve is cutting rates to bolster a softer American economy, the European policy has probably increased the trend toward a weaker dollar. But Mr. Trichet emphasized that the bank’s primary mandate is to fight inflation. He said,
Each of us in our own environment did what was required by the situation.
