The euro currency used by 13 European Union countries touched record highs against the dollar for the past eight trading days. And that, VOA's Barry Wood reports, worries the Europeans whose exports are getting more and more expensive.
The euro has risen by 66 percent against the dollar over the past five years. In 2007 alone, the euro has gained eight percent to just under $1.43.
Europe's corporate leaders and politicians worry that the euro's strength will make exports uncompetitive and slow economic growth. The economy of the 13 countries sharing the euro has been growing at a two and a half percent annual rate, somewhat faster than the two percent growth registered in the United States over the past six months.-
At a conference in Malta Tuesday, European Central Bank chief Jean-Claude Trichet said Washington is also concerned.
"I repeat, that I have noted with extreme attention and interest that the [US] secretary of the treasury and my colleague at the Federal Reserve Board have said that a strong dollar is in the interests of the United States of America," said Jean-Claude Trichet.
Euro zone officials have said they will press Treasury Secretary Henry Paulson at this month's G-7 meeting of the finance ministers to reassert that a strong dollar is in the U.S. interest. They hope a G-7 statement to that effect will help restore balance in the currency markets.
In Washington, Fred Bergsten, the head of the private Peterson Institute, said that the reluctance of China to allow its currency to rise significantly against the dollar has resulted in Europe bearing the brunt of an otherwise useful dollar adjustment. Bergsten wants Europe and America to cooperate in forcing a revaluation of China's currency.
"In the adjustment process, throwing it all on to Europe, this would seem to suggest a need for some more active European initiatives along with the United States," said Fred Bergsten.
Bergsten supports the gradual decline of the dollar, saying a weaker dollar helps correct the huge financial imbalance caused by the United States importing far more than it exports.