Euro dips after Trichet remarks, but dollar still seen wobbly


26/04/2011 00:00 AST  Guardian.co.uk

The euro slipped on Tuesday after European Central Bank Governor Jean-Claude Trichet said he shares the view that a strong dollar is in the interest of United States, a comment taken by some market players as showing frustration over the dollar's relentless fall and also an attempt to talk up the currency.

Trichet also told two Finnish newspapers he does not see any significant second-round inflation, prompting traders to dump euro long positions against the dollar, although many traders think the dollar will remain under pressure from a perception that the U.S. central bank is far more reluctant to tighten its policy any time soon. [ID:nEBE7DA00T]

"I don't take it lightly that Trichet is talking about the dollar rather than the euro. European policymakers became alarmed when the euro rose above $1.45 in 2007 and they started to rein in the dollar's fall," said Minori Uchida, a senior analyst at the Bank of Tokyo-Mitsubishi UFJ, adding that the world's policy-makers are increasingly worried about the dollar's fall.

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