Strong Euro not a concern

THE dollar fell to a three-month low against the euro yesterday after Germany’s deputy finance minister said a stronger European currency isn’t a concern, boosting speculation policy makers will let the dollar drop in coming months.

“The 12 nations sharing the euro can tolerate a rise in the currency as long as it isn’t too rapid,” said Germany’s deputy finance minister, Mr Karl Diller yesterday. The remarks follow similar comments from European finance ministers, and helped push the dollar down for a third day.

“We’re only about halfway through this downtrend in the dollar,” said Mr Steven Barrow, a currency strategist at Bear Stearns in London.

“We have seen the dollar fall in the last couple of years as the market has suspected. The US is easing its so-called strong-dollar policy,” Mr Barrow said. The dollar weakened to $1.1816 per euro in New York trading at 10:30am yesterday from $1.1761 late Tuesday, and earlier fell to $1.1839, the lowest since June 17.

“We don’t think the present foreign-exchange rate is a cause for concern, under the proviso that the currency moves smoothly, I emphasise smoothly - within the range of $1.15 to $1.20’ per euro,” Mr Diller said in an interview.