BBC News Online: Business

Euro takes new beating

Remarks by Klaus-Dieter Kuehbacher dampened expectations that the ECB might intervene in the market, which had provided some support to the beleaguered currency.

Mr Kuehbacher said intervention would only work if the US and Japan took part as well, but he said he saw no willingness from the US to get involved.

"Any intervention by the ECB against these big partners would have no effect," Mr Kuehbacher said.

"There is nothing left for Europe than to push ahead with structural reforms," he said.

Following Mr Kuehbacher's comments, the euro fell by almost half a cent to below the mid-$0.89, down from its morning highs of about $0.90.

But it remains about a cent above its record low of $0.8844 hit last week.

Dragged down

"The euro has been dragged down by the recent comments by Kuehbacher," said Lee Ferridge, head global currency strategist at Rabobank in London.

Mr Kuehbacher does not have a seat on the ECB's policy making council.

The euro fell on Monday after EU finance ministers voiced only "common concern" about the currency's weakness, but did not call for an intervention on the currency markets.

The statement disappointed financial markets because they had been waiting for a stronger statement.

In the run-up to the ministerial meeting, the euro had moved back above the $0.90 level, but soon fell again by more than a quarter cent against the US dollar.

The euro's fall to a new low last week had created a growing sense of crisis around the currency.

The international financier George Soros told the BBC that without central bank intervention the currency would continue to slide, and could eventually "disintegrate".

The beleaguered currency has lost nearly a quarter of its value against the US dollar since its launch at the start of last year.