Ministers to focus on euro strength

Written By Unknown on Senin, 11 Februari 2013 | 19.15

11 February 2013 Last updated at 04:00 ET

France is set to voice concerns about the strength of the euro at a meeting of eurozone finance ministers later.

French Finance Minister Pierre Moscovici is worried that the rising single currency is making the country's goods less competitive.

The euro has risen by 6% against a basket of other currencies in the past six months.

But with other countries also wanting to weaken their exchange rates, there are renewed fears of "currency wars".

Japan has also moved to force down the value of the yen.

Last week, Mr Moscovici called for the European Central Bank (ECB) to consider setting a target for the single currency - steering it lower when the value got too high.

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But both Germany and the ECB are against such a move, arguing that the central bank's mandate is to ensure price stability and not to manage currency markets.

However, ECB President Mario Draghi was widely thought to be trying to talk down the euro at his interest rate press conference last week.

"The exchange rate is not a policy target but it is important for growth and price stability," Mr Draghi said in response to a question.

"We will closely monitor money market developments."

Daragh Maher, a senior currency strategist at HSBC, told the BBC that France was probably more "twitchy" because numbers were showing its competitiveness to be declining.

Today's Eurogroup meeting - attended by eurozone finance ministers - is the first to be hosted by the Netherlands. Financial aid to Greece and Cyprus is also likely to be discussed.


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