ECB is 'not concerned by euro strength'

A member of the European Central Bank (ECB) governing council has played down concerns about the rising value of the euro versus the dollar.

Yves Mersch has given newspaper interviews reportedly claiming that present currency issues were not to be feared, predicting the potentially damaging fluctuations and spiraling crude oil prices to be a temporary phenomenon.

Mr Mersch was responding to recent pressure placed on the Eurozone by dollar weakness; while oil and gold prices have spiraled in response to the falling greenback, France has expressed concern that its exports could be held back by euro appreciation.

He reported response was that "the euro is strong because the external accounts are in balance and growth prospects are strong", with a weak dollar identified as problematic only if changes were extreme.

"What's bad are abrupt exchange rate movements. It's normal that the economic slowdown in the United States is reflected in the exchange rate. But it's important that this does not disturb economic flows unduly."

Insight was also provided into what the ECB considered as 'speculative' buying in oil and gold, with the governing council member predicting that current levels of price inflation could not last.