After his annus horribilis in 2000, European Central Bank president Wim Duisenberg has cause for celebration as the bank sees in the new year.
Having survived the euro's tumble to a low last October of $0.8230 and a barrage of criticism over his own gaffes and apparent lack of a consistent policy direction from the bank's governing council, he will have enjoyed the steady rise in the currency as concerns mount over weakness in the US economy.
Even this week's dramatic cut in US interest rates failed to do more than cause a temporary blip in its inexorable recovery.
The euro is hovering around $0.95, more than 15 per cent ahead of its recent lows, and the dismissive talk of last year has turned to forecasts of the currency hitting parity with the dollar by the end of the second quarter of 2001.
From Mr Duisenberg's point of view, the timing could not have been better. With the countdown to the introduction of euro notes and coins entering its final year, the ECB will be keen to engender confidence in the currency in the 12 states in which it will become a practical reality next January.
Now the challenge is to manage this good fortune. When the currency was down, the blame went on the movement of capital flows from Europe to the US where growth was then higher. With the tables turned, the bank will need to ensure the currency's new strength is not undermined by economic weakness or burgeoning inflation in the EMU.
