March 10 (Bloomberg) -- European Central Bank President Jean- Claude Trichet said he's ``concerned'' about the euro's appreciation, intensifying his rhetoric after the currency climbed to a record against the dollar.

``We're concerned about excessive exchange-rate moves in the present circumstances,'' Trichet told reporters in Basel, Switzerland today. It's the first time Trichet has specifically expressed worry about the currency since November, when he opposed ``brutal'' moves.

The euro fell as much as 0.3 percent after the comments before rebounding, as investors decided Trichet's ability to weaken the currency is limited. The strongest European inflation in 14 years is preventing the ECB from cutting interest rates while the Federal Reserve is slashing borrowing costs to stave off a recession in the world's largest economy.

``Trichet is making a distinct change in emphasis,'' said Lee Hardman, a currency strategist at Bank of Tokyo-Mitsubishi UFJ Ltd. in London. Still, ``while the ECB is on hold and the Fed is cutting rates, rate differentials will continue to move in support for the euro.''

The euro traded at $1.5374 at 4 p.m. in Frankfurt. It rose to a record $1.5459 on March 7, a day after Trichet declined to sound a warning following the ECB's decision to leave its key rate unchanged at 4 percent.

`Strong Dollar'

On that occasion Trichet noted only that U.S. authorities support a ``strong dollar,'' an observation he repeated today with ``extreme attention.'' U.S. Treasury Secretary Henry Paulson said March 7 that a strong dollar is ``in our nation's interest.''

Trichet declined to comment on exchange rates as he spoke to reporters after chairing a meeting of central bankers from the Group of 10 nations today. At the end of the press conference, however, he offered to comment on currencies in his capacity as ECB president. On a March 3 trip to Brussels also he raised the topic without being prompted by reporters.

European politicians including French President Nicolas Sarkozy say the euro's gain is a ``shock' to their economy by driving up the cost of its exports. Still, record French exports drove an unexpected increase in the country's industrial output in January, the national statistics office said today. German sales abroad jumped 3.8 percent at the start of the year.

Trichet's comments today are a signal to governments that he's not ``indifferent to the euro,'' said Geoffrey Yu, a Zurich- based currency strategist at UBS AG. ``He is showing that the ECB is monitoring the situation, but is not willing to characterize its moves as needing intervention,'' said Yu.

Dollar Slide

The ECB last intervened in currency markets in 2000 to strengthen its exchange rate and has never sought to weaken it. Analysts say it is unlikely to do so without a U.S. decision to support the dollar, whose weakness is currently supporting growth in the world's largest economy by boosting its exports.

``Trying to manipulate the euro through either words or outright intervention is unlikely to be successful when the dollar is sliding,'' said Steve Barrow, chief currency strategist at Bear Stearns Cos. in London.

Unlike the Fed, which has cut its benchmark interest rate 2.25 percentage points since September, Trichet's ECB has refused to reduce rates with inflation in breach of its 2 percent goal.

By signaling an unwillingness to take action, the ECB is indicating ``tacit support for its record-high euro as it uses currency policy to contain inflationary pressures rather than monetary policy,'' said Ashraf Laidi, a currency analyst at CMC Markets in New York.

ECB Executive Board member Juergen Stark told a conference in Paris on March 7 that the ECB does not target a euro-dollar exchange rate. Currency developments ``should be taken into account by monetary policy only to the extent that they have a medium-term influence'' on inflation, he said.

To contact the reporters on this story: Simon Kennedy in Paris at skennedy4@bloomberg.net; Simone Meier in Basel at smeier@bloomberg.net.

Last Updated: March 10, 2008 11:51 EDT