December 3, 2004


Central bank keeps quiet about its euro options (Mark Landler, December 3, 2004, The New York Times)

Will the European Central Bank intervene in the world's currency markets to put a lid on the euro?

It has become a tantalizing prospect for many Europeans, who are nervous about the economic impact of their rapidly rising currency, and frustrated by Europe's seeming inability to do anything about it.

Rumors that the bank might enter the market bubbled up this week after a senior official in the Japanese Finance Ministry, Hiroshi Watanabe, was quoted as saying that Japan and Europe could take "harmonized action" to temper the appreciation of their currencies against the dollar.

Central banks typically intervene by using their reserves to buy or sell currencies in massive amounts to influence their value. The pressure to mount such a rescue operation has grown as the euro rises to new heights against the dollar, denting Europe's exports to the United States.

Have they noticed what's happening to the price of oil?

Posted by Orrin Judd at December 3, 2004 10:10 AM
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