Euro volatility 'excessive' says Juncker

The euro's exchange rate is now excessively volatile, contravening a “crystal clear” call from the Group of Seven earlier this month, the chairman of euro zone finance ministers Jean-Claude Juncker said today.

"It was not the intention of the G7 to lead to the results we are noting today," Mr Juncker told reporters. "The recent statement of the G7 is crystal clear," he added.

The euro hit record highs above $1.60 yesterday after comments from European Central Bank officials triggered market speculation the ECB's next interest rate move could be a rise instead of a cut amid record high inflation.

Asked if the euro's rate was excessive, Mr Juncker, the Luxembourg prime minister who chairs monthly meetings between euro zone finance ministers and the European Central Bank, said: "We never refer to rates as excessive, we refer to volatility, and the volatility is excessive. We are observing excessive volatility at the moment."

Asked if markets were right to price in an ECB rate rise, Juncker said he would not comment on monetary policy, but added: "I don't like the way things are developing."

Finance leaders from the Group of Seven industrial countries - the United States, Canada, Japan, Britain, Italy, France and Germany - said in a statement on April 11th they were concerned about sharp fluctuations in foreign exchange markets.

"Everyone has to know that the G7 in its recent statement was very clear - we did express the view that the excessive volatility is undesirable for economic growth and we didn't like sharp moves as far as the exchange rate is concerned," he said.

He said financial markets should pay more attention to longer-term developments, rather than short-term information.

"I do think financial markets should pay more attention to developments to come and should be concentrating less on short-term information," he said.