The euro has dropped sharply against the dollar this morning despite comments from the US Treasury Secretary that the US has no plans to intervene in the currency market. John Snow also said that Japan and Europe should not blame a weak dollar for their economic woes. Snow's comments, said in an interview on Friday but not released until last night, prompted a temporary spike in the euro to USD1.1541, from USD1.1485, but the single currency has since dropped back to USD1.1484.
But the dollar's gains remained limited after Snow's statement that government intervention in the currency market has little effect on an economy, suggesting that the US has no intention of buying dollars to prop up the currency. "As a general rule, we'd prefer to see interventions kept to a minimum," Snow said. Analysts said the comments make it very likely that the euro will move back up to USD1.16 against the greenback. Yesterday, the single currency climbed to a new four year high of USD1.1626. The dollar also remains weak against the yen, at 116.48 yen. //www.fxcentre.com