Rising euro getting out of line with fundamentals: EU's Almunia

0 Comments | AFP, April, 2008

WASHINGTON (AFP) — The euro has risen too high against the dollar to the point it is getting out of line with economic fundamentals, European Union Monetary Policy Commissioner Jaoquin Almunia said Saturday.

"The euro's real effective exchange rate is approaching a level where it would clearly no longer be in line with economic fundamentals," Almunia told the spring meeting of the International Monetary and Financial Committee.

Almunia said "excess volatility and disorderly movements in exchange rates are undesirable for economic growth.

"The increased volatility in foreign exchange markets, which has accompanied the (recent) financial turmoil, points to the risk of exchange rate overshooting," he said, according to a text of his remarks.

He said the...