The euro resumed its downward path yesterday after EU finance ministers expressed concern about the currency's present level but gave no indication that they were preparing to intervene in the markets to boost its value.

The euro was trading above 90 US cents in the morning but tumbled by more than a cent following the ministers' statement, before recovering slightly to reach 89 1/2 US cents by late afternoon.

The statement, issued after a meeting of finance ministers from the 11 euro-zone countries in Brussels, said the ministers agreed with the president of the European Central Bank, Mr Wim Duisenberg, that growth in the euro zone was very robust.

The ministers agreed to double the foreign currency reserves available to the ECB should the bank choose to intervene in the markets, bringing the value of its war chest up to about €90 billion (£70.9 million).

Officials said this decision had been planned since last year but many analysts interpreted it as an attempt to send a message to the markets that intervention remained an option.

"On the subject of intervention, we have said that it is an instrument which is available," the French finance minister, Mr Laurent Fabius, said after the meeting.

The ECB has so far refrained from intervening in the markets and most analysts believe it will continue to resist calls to start selling its foreign exchange reserves. Unilateral intervention seldom succeeds, particularly if it attempts to defy the market trend.

Concerted action with the US and Japan might have a better chance of making a lasting impact but Washington is unlikely to co-operate with such a plan.

It would make little sense for the US to attempt to weaken the dollar at a time when the Federal Reserve is expected to raise interest rates - particularly since the strong dollar helps to keep inflation down.

The ECB's governing council is expected to discuss the possibility of intervention when it meets in Frankfurt on Thursday and analysts will be watching the meeting closely for an indication of the bank's intentions.

Germany's Finance Minister, Mr Hans Eichel, insisted yesterday that Europe's politicians were confident they were managing the economy - and the common currency - well.

And Mr Rolf Schneider of the Dresdner Bank said low inflation in the euro zone meant the euro's poor performance against other currencies should not worry consumers.

"Consumers can look calmly into the future. What is decisive is the low level of prices here," he said.

Separately, the region's exporters believe it may soon be necessary to act against the very weakness in the single currency which has given their competitiveness such a boost.

The head of Germany's Wholesale and Foreign Trade Association, Mr Michael Fuchs, said yesterday the ECB should intervene on the foreign exchanges once the euro gets to 85 US cents, only 3.5 cents below record lows hit last week.

For euro zone exporters, it is neither the poor public image of the battered single currency that matters nor the profits of foreign investors, who have seen it lose a quarter of its value against the dollar since its January 1999 launch.

Rather, it is the fear that the ECB may raise interest rates, more than it might otherwise have done, to curb inflation risks being stoked by the euro's protracted fall, analysts said.

"Exporters are on easy street as the weaker euro has boosted their competitiveness and it just underscores how far it has overshot if even they are saying they have had enough and don't need any more gains," said Mr Robin Marshall, chief economist at Chase Investment Bank in London.

"The concern for them is that if the euro continues to fall it could end up prompting an aggressive monetary policy reaction, and then they may end up with a higher exchange rate as well - so stability is as important as levels."