European policy-makers gave conflicting signals yesterday on whether they believed central bank intervention on foreign exchange markets might be appropriate for boosting the euro's external exchange rate.

In Brussels, Mr Wim Duisenberg, European Central Bank president, repeated the mantra adopted at the weekend meeting in Versailles by euro zone finance ministers that intervention to aid the euro was a tool available to them.

Speaking in a German press interview, Mr Romano Prodi, European Commission president, said support for the euro might be in the interests of the US because it was running a high current account deficit.

"Something like this is never simple, especially not before a US election, even if we are now at a point where it would be in America's interests. Nobody can live forever with such a current account deficit," Mr Prodi told Stern magazine.

However, two Bundesbank council members suggested that intervention by the ECB and other central banks might have no effect because the daily volume of foreign exchange transactions was so enormous. "When you realise that we now have daily turnover of $1.5 trillion in all sorts of currencies, then you can easily imagine that you can't intervene against that," said Mr Hans-Jurgen Kobnick.

Mr Franz-Christoph Zeitler, another Bundesbank member, said intervention was counterproductive when it was used against a market trend.

When euro zone finance ministers said last weekend that intervention was an option, financial markets ignored the message and continued selling the euro. It touched a new lifetime low early yesterday of $0.8553 and 97.7 yen before rising above $0.86 later in the day.

Yesterday, Mr Duisenberg told members of the European Parliament's economic and monetary affairs committee he could not discuss using intervention. "I will fully inform the markets and you about them (currency interventions) after they have taken place and not before," he said.