EU tries to rein in euro's rise

 

 

BERLIN, Apr. 22 (Reuters) — Europe’s finance chiefs renewed efforts on Friday to curb their currency’s relentless rise versus the dollar and yen, sharpening the focus of their message in the absence of clear public support from Washington and Tokyo. European Central Bank President Jean-Claude Trichet repeated a warning to currency traders that they could get burned betting one way and he sought to dispel the idea that the United States and Japan were happy with their weaker currencies. Trichet said US Treasury Secretary Henry Paulson told the G7 powers a week ago he was committed to a strong dollar. Trichet and JeanClaude Juncker, representative of euro zone finance ministers, said Japan too had made it clear in public and private that exchange rates should reflect Japan’s strengthening economy. "Exchange markets should be aware there are two-way risks in any bet," said Trichet, keen to reaffirm a coherent message with Juncker in the name of the euro zone as a whole. The comments had little immediate impact on the euro, which was trading at around $ 1.3600 in late European trade on Friday, not far off its record $ 1.3670 set in December 2004. It was trading between 161 and 162 yen. The euro hit a record 162.42 yen this week as traders took the absence of broader support by the Group of Seven major developed nations for Europe’s case as a cue to keep pushing the euro and sterling higher and the dollar and yen down. German Finance Minister Peer Steinbrueck let Trichet and Juncker do the talking on Friday. "We agreed that on currency questions and exchange rate questions only the ECB president and the chairman of the euro group Jean-Claude Juncker would say anything so there won’t be a lot of different voices speaking at the same time," he said.

 

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