French Finance Minister Pierre Moscovici warned Tuesday of the euro's current strength ahead of the European Central Bank's meeting this week when a decision on interest rates will be made.
The European Central Bank is under pressure to cut rates at its regular monthly policy meeting on Thursday amid growing deflationary fears in Europe.
"We are seeing rates not seen since 2011," Moscovici noted at a press conference, referring to the exchange rate between the US dollar and the euro.
The euro recently soared past the threshold of $1.38, its highest level in two years.
But it tumbled to $1.3474 from $1.3516 late in New York on Monday as investors bet that the ECB would slash interest rates following soft eurozone inflation data last week.
The annual rate of inflation for the 17 countries that share the euro slowed unexpectedly to just 0.7 percent in October, the lowest rate in four years, raising fears the single currency area may tip into deflation -- a vicious circle of falling prices, wages and output.