The dollar continues to weaken against the euro after European Central Bank President Jean-Claude Trichet again failed to say anything that might prevent that.
Trichet was questioned by reporters shortly after the bank announced that it would keep its key interest rate unchanged at 2% as expected. Anyone hoping that he might use stronger rhetoric to deter the euro’s rise was disappointed: He said: “We consider recent moves to be unwelcome. As regards to intervention, you know I never comment on such matters.” The furthest Trichet would go was to say that intervention is an option open to all central banks. That despite the fact that the euro is now trading at over $1.3350 and had earlier hit a record high of $1.3385. A strong euro makes exports from the 12-nation single currency area less competitive overseas. That threatens to stifle the region’s already weak economic recovery which is heavily reliant on exports. The US government shows no sign of moving to prop up the dollar as it benefits the economy there and helps American exporters.