ECB intervenes again to stabilise euro By Tony Major in Frankfurt and Christopher Swann in London Published: November 6 2000 21:01GMT | Last Updated: November 6 2000 22:11GMT

The European Central Bank has intervened in foreign exchange markets for the second consecutive trading day, signalling its determination to stabilise the euro.

The move by the bank drove the single currency almost a cent higher to $0.87. But the impact was short-lived.

Figures showing that growth in the euro-zone and its biggest economy, Germany, is slowing pushed the euro back below the level at which it had started the day. It finished in London at $0.861, down from its close on Friday.

The Reuters euro-zone business activity index - which charts the health of the services sector - fell to 55.7 in October from 60.2 in September.

Economists said that while intervention had enjoyed minimal success, the ECB appeared to have a more activist policy.

When the ECB first intervened on September 22 it was joined by central banks from the Group of Seven leading industrialised countries.

Euro-zone policy makers concede that the US Treasury would not want to participate in further intervention before the presidential elections.

The ECB's go-it-alone move, its third since Friday morning, appeared to be aimed at setting a floor for the currency at around $0.8600-$0.8650, rather than driving it higher.

Jim O'Neill, head of currency research at Goldman Sachs, said: "They will leave it to the market to push the currency higher."

Economists remained sceptical about the possibility of turning round market sentiment without the support of the US Federal Reserve and the Bank of Japan.

Romano Prodi, European Commission president, supported the ECB's move, saying intervention had been a "very well calculated risk."

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-- Martin Thompson (mthom1927@aol.com), November 06, 2000