The vice-president of the European Central Bank yesterday described the euro's exchange rate as "ridiculous" and warned that because of it the US could not compete in key industries.
On the day the dollar surged to eight-month highs against the euro, Mr Christian Noyer also blamed the simmering debate on who should replace the bank's chief Wim Duisenberg for putting pressure on the single European currency.
"The (dollar/euro rate) will correct," he said, adding that if it did not several US industries would be out of business within 10 years. The euro has been sliding steadily since January, largely due to worries about European growth prospects.
It hit eight-month lows near 83.50 cents overnight before going to session highs around 84.20 cents yesterday after news of a sharp drop in US non-farm payrolls.
Mr Noyer insisted fundamentals did not back the market's growth worries and that there was no danger the euro zone would slip into a recession.
The single currency has also been under pressure from what markets see as a lack of credibility at the ECB, linked to a refusal to help euro-zone growth by aggressive monetary slackening.
The question of Duisenberg's replacement has surfaced recently in comments from Luxembourg Prime Minister JeanClaude Juncker who said he and other people have been sounded out as potential successors.
