European Central Bank
, after weeks of chatter, finally intervened to prop up the sinking euro today, in conjunction with U.S. and Japanese monetary authorities.
The intervention on behalf of the currency has propped up the euro against the dollar and the yen this morning.
Lately, the euro traded at $0.8840, up from $0.8614, and at 94.65 against the yen, up from 91.40.
The euro has been structurally weak ever since its inception at the beginning of 1999, and lately people had become concerned about the detrimental effects on other economies.
It was thought that the euro's weakness was not related to Europe's economic fundamentals. But lately stories of economic pressure brought on by high oil prices have changed that sentiment. November crude oil futures were this morning trading down 10 cents to $33.90 a barrel.
Most recently, U.S. chip maker
warned of pressure on third quarter earnings because of weakened demand in Europe. High-tech companies often do business in dollars, and for Europeans, the dollar is quite expensive now, which hurts demand.
This action is the first three-pronged coordinated intervention since 1995, when U.S., German and Japanese authorities intervened in the foreign markets.
"On the initiative of the European Central Bank, the monetary authorities of the United States and Japan joined with the European Central Bank in concerted intervention in exchange markets because of their shared concern about the potential implications of recent movements in the euro exchange rate for the world economy," a statement from the ECB said this morning.
took a close look at the
embattled euro in a separate story.