Connect to share and comment

Merkel says euro rate of $1.30-$1.40 'normal'

PlacardEnlarge
(Globalpost/GlobalPost)

German Chancellor Angela Merkel said on Wednesday that a euro exchange rate of $1.30-$1.40 was "normal", in an unusual comment on foreign exchange markets.

"Euro rates of between 1.30 and 1.40 are normal in the historical context of the euro," Merkel told an economics conference here, amid concerns in some quarters that the euro is too strong against other currencies.

She said that Germany was determined to push for a "free movement" of exchange rates and says that in this respect the recent statement by finance ministers from the group of 20 developed and developing countries was a "good signal".

At a recent meeting in Moscow, leading powers undertook not to target specific exchange rates or devalue currencies to make them more competitive, amid concerns of "currency wars".

Some eurozone countries, notably France, have expressed concern that the level of the euro, which has risen recently on the foreign exchange markets, could hurt exports and dampen any nascent recovery in the eurozone.

And some have accused Japan of deliberately trying to engineer a lower exchange rate for its currency, the yen, in a bid to boost exports.

The yen has tumbled over the past few months, as the Bank of Japan has vowed to implement aggressive monetary easing.

Without mentioning Japan directly, Merkel noted that "we are again seeing that there are still efforts to maybe weaken one's own currency through certain monetary policy measures and therefore create better export opportunities."

She said: "We at least do not think a great deal of carrying out an active exchange rate policy."

ric/spm/hd

http://www.globalpost.com/dispatch/news/afp/130220/merkel-says-euro-rate-130-140-normal-0