The European Central Bank (ECB) will do all that it can to ensure that the dollar's correction is slow and gradual, according to a newspaper interview with ECB President Wim Duisenberg.
A dollar decline is unavoidable given the huge US trade deficit, but the euro should not be the only currency to bear the brunt of its adjustment, the Spanish business newspaper Expansionquoted Mr Duisenberg as saying in today's edition.
"We hope and pray that this adjustment, which is unavoidable, will be slow and gradual. Until now, the adjustment is only against the euro," Mr Duisenberg was quoted as saying.
An ECB spokesman said that Mr Duisenberg did not comment on currency intervention to halt the euro's rapid climb against the dollar, as the Financial Timessuggested.
The Financial Timessaid today that Mr Duisenberg, in the interview with sister newspaper Expansion, had implied that ECB intervention to halt the euro's sharp climb against the dollar was unlikely.
The euro has jumped over 7 per cent in the past month back toward its record highs against the dollar, but it retreated a little on Friday after stronger-than-expected US data and was trading on Monday around $1.1549
In the interview, Expansionalso reported that Mr Duisenberg said a very gradual recovery in the euro zone has already begun.