FRANKFURT, Jan 22 - The European Central Bank on Thursday repeated its message that it is worried about big currency swings but gave no signs its outlook for a gradual euro zone recovery is about to change. "As regards exchange rates, in the present circumstances, we particularly stress stability and we are concerned about excessive exchange rate moves," the ECB said in the foreword to its January monthly bulletin, echoing concerns raised by ECB President Jean-Claude Trichet at a meeting of G10 central bankers in Basel last week. Analysts said Trichet's statement was a successful verbal intervention aimed at driving down the euro after it struck a record high against the dollar just below $1.29. The euro was trading at $1.2642 at on Thursday at 0855 GMT, just ahead of the bulletin's release.
Elsewhere, the bulletin was largely a repeat of the ECB's January 8 policy statement, which said interest rates at their current record low level of 2.00 percent are appropriate to keep a lid on inflation. Analysts are split about whether the central bank will raise rates towards the end of 2004, or leave rates unchanged into next year. The euro zone economy has started to pick up speed and will gradually shift gear this year, while inflation is to remain subdued and fall below the central bank's two percent tolerance ceiling this year, the ECB said. The euro gained some ground this week after the ECB on Monday joined a statement by euro zone finance ministers, who said they were worried about the excessive moves in currency markets and stressed stable foreign exchange markets are key.//