Massive intervention boosts euro

Although the Swiss central bank did not intervene, the franc gained significantly on the dollar in the immediate aftermath Keystone

Central banks around the world launched a massive joint intervention on Friday to support the single european currency.

The intervention included the European Central Bank, the United States Federal Reserve, the Bank of Japan and the Bank of England.

Although the Swiss National Bank did not take part in the intervention, the franc gained six cents on the dollar in the immediate aftermath and fell to SFr1.52 against the euro.

The euro strengthened against all currencies, including the dollar, in the wake of the news.

A statement from the banks said they acted out of concern that the euro’s persistent weakness might hurt the global economy.

Rumours of intervention had been rife but analysts thought the US was unlikely to sell dollars in an election year even if the weak euro was hurting corporate profits there.

The euro hit new lows against the dollar, the franc and the yen this week. At one point it fell below 85 cents to the dollar, a depreciation of around 27 per cent since its launch in January 1999.

The euro faces another key test next week when Denmark holds a referendum on membership.

by Michael Hollingdale