The rapid ascent of the Euro is welcomed by Brussels, while experts warn that an unchecked rise could be destabilising for the economy. Meanwhile, analysts state that the USD is not only falling in value against the Euro, but against the major currencies.
The Euro this week surpassed the 98 cent mark, for the first time since it was created in February, 2000, bringing a wave of euphoria to Brussels but a warning by EU Economic Affairs Commissioner Pedro Solbes, who stated: “We are always wary of an excessive volatility of the Euro. The single currency was undervalued and did not correspond to the basic parameters of the European economy. However, now the increase seems too strong and too fast. Sudden alterations in the parity between the Euro and the USD are undesirable because they affect the economic equilibrium”.
One of the reasons for the rise of the Euro is the persistent low in the NYSE, another being a worsening of the balance of payments, resulting in a lack of confidence in the USD.
The result of this is the USD falling not only against the Euro but also against other major currencies, such as the Swiss Franc.
John ASHTEAD PRAVDA.Ru LONDON UNITED KINGDOM