LONDON, June 9 - The European Central Bank is considering intervening in the currency market to rein in the buoyant euro if the single currency climbs to levels above $1.30 , the Times newspaper said on Monday. At least one senior member of the ECB's governing council, the governor of a leading national central bank, had openly discussed the prospect of intervention during recent private meetings, the Times said. The story was published on the newspaper's Website.
The ECB official implied that it would be keen to halt the euro?s rally if it rose to between $1.33 and $1.35, the Times said. The single European currency last month rose above $1.1745, the level at which it was launched in January 1999, and shot up to record highs above $1.19. Traders said the Times report had so far had a negligible impact on the market. The euro was bobbing slightly below 1.17 early on Monday in Tokyo. "If it were $1.20 it's a different story, but it's $1.30," said Kosuke Hanao, head of foreign exchange at the Royal Bank of Scotland in Tokyo.
The Times said a main reservation expressed by the ECB official over any intervention was whether U.S. support for an operation could be secured. It said he was understood to have noted that the scale of the U.S. current account deficit could make Washington reluctant to halt a dollar correction that would help to alleviate this problem. While the euro's sharp appreciation is piling pressure on the embattled euro zone economy's manufacturing sector, the dollar's decline is a boon for American industry.//