MercoPress. South Atlantic News Agency

Subtle message from strong Euro Trichet to Federal Reserve

European Central Bank President Jean Claude Trichet said he's “concerned” about the Euro appreciation after the currency kept hovering on record rates against the US dollar. It's the first time Trichet has specifically expressed worry about the Euro vis-à-vis other currencies since November.

"We're concerned about excessive exchange-rate moves in the present circumstances" Trichet told reporters in Basel, Switzerland. The Euro traded at 1.5374 US dollar on Monday in Frankfurt after having reached 1.5459 on March 7, after the European Central Bank decision's to leave its basic rate unchanged at 4%.. Trichet is facing a difficult dilemma, while mandated to keep the strongest European inflation in 14 years on check, he can't cut interest rates to help stave off a recession as some EU country members are demanding or preventing the rate differential with the US dollar from moving in support of the Euro. The US Federal Reserve has been slashing rates and is scheduled to continue on the same track when it meets next March 18, further plunging the US dollar against the Euro and Yen. This however has helped to boost US competitiveness and exports drastically reducing the country's deficits. Trichet declined to comment on exchange rates as he spoke to reporters after chairing a meeting of central bankers from the Group of 10 nations Monday. At the end of the press conference, however, he offered to comment on currencies in his capacity as ECB president. On March 3 he raised the topic without being prompted by reporters. European politicians including French President Nicolas Sarkozy argue the Euro appreciation is a "shock" to the EU economy by driving up the cost of its exports. Unlike the Fed, which has cut its benchmark interest rate 2.25 percentage points since September, Trichet's ECB has refused to reduce rates with inflation in breach of its 2 percent goal.