20 January 2004, 13:35  Euro jumps 1pc after EU statement

The euro rose by more than 1pc this morning after EU finance ministers expressed concern about "excessive" exchange rate moves, but did not say the single currency was overvalued. Finance ministers and the ECB stressed overnight the need for "stability" in the currency markets after the euro rose by more than 12pc in one month to a record level just below USD1.29. "Interestingly, while they may not have called for a 'strong and stable euro', neither did they declare any opposition to further euro strength," said Niall Dunne, economist at Ulster Bank.
He said that while the statement should not be interpreted as a green light to start selling the dollar again, it indicates that it was the pace of the dollar's collapse - rather than the actual euro value - that "frightened euro area officials into action" last week. This morning, the euro rose 1.1pc to USD1.2464, after it dropped to USD1.2350 yesterday in the wake of stronger US economic data and the string of warnings from ECB officials that "brutal" currency moves were unwelcome. //www.fxcentre.com

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