The euro has not risen to an uncomfortably high level, and the dollar is still overvalued, the head of the IMF's European Department said today.
The euro rose to a record high above $1.47 last week and has gained more than 10 per cent against the dollar since the start of the year.
But Mr Michael Deppler noted that, on an effective exchange rate, the euro had risen little more than 2 per cent since the start of 2005 and remained "within a range" close to its historical average.
"The current account is roughly balanced and exports are doing relatively well," he said.
The dollar's decline has accelerated since the IMF's annual meeting in mid-October but Mr Deppler said the fund remained of the view that the US currency was overvalued on a broad basis.