Euro exchange rate: Should the ECB intervene?

In the course of the revaluation of the euro over important commercial currencies, in particular the US dollar, many have insisted that the European Central Bank intervene in order to stop the rise of the euro and to counteract the feared effects on growth and employment. Joachim Fels, Morgan Stanley, London, considers this an adequate approach should the dollar should take a renewed plunge, while for Dr. Martin Hüfner, HypoVereinsbank, an intervention by the EZB is currently unwise when all factors are weighed up: "But the time could come when intervention would make sense. This would be the case if developments are too fast … or if the dollar exchange rate surpassed the 1.50 mark, which would change the picture for prices and economic activity." Also Dr. Thomas Mayer, Deutsche Bank, London, is sceptical: The conditions for successful foreign exchange market intervention do not exist at the present time. Prof. Ansgar Belke, University of Hohenheim, and Dr. Thorsten Polleit, Barclays Capital, both argue against exchange market intervention: The ECB should fulfil its core mandate: safeguarding the euro's spending power: "In a market economy it is the task of businesses, not monetary policy, to continuously adapt to changing market conditions."