European finance ministers will meet for a second day of talks today amid waning signs that the EU will intervene to curb the euro's gains. The single currency hit a four year high above USD1.16 last night, extending an appreciation in value that has put intense pressure on exporters trying to sell their goods outside the eurozone. "On balance a strong euro is in the interests of the euro area and the world economy," said Pedro Solbes, the European Economic and Monetary Affairs Commissioner, after a meeting of ministers.
He added that the rise was a correction for the previously undervalued currency but did say that officials would monitor for signs of volatility and overshooting. The markets were also looking for signs that the European Commission would exert some pressure on the European Central Bank to lower interest rates, after it left borrowing costs unchanged at a meeting last week. ECB president Belgian Finance Minister Didier Reynders suggested that the euro's strength gave the ECB scope to cut interest rates, saying that the bank had "more room on the monetary side". //www.fxcentre.com