Interest rate and foreign exchange markets are hogging the news at the moment, even in countries where there are no changes to be made. But the European Central Bank (ECB) once again finds itself in a hole and digging, while foreign exchange dealers throw the occasional spade at the board members to make the job easier.

Although the markets had discounted a rejection of the euro by Danish voters (and that wouldn't have been the foregone conclusion a few months or even a few weeks ago), it leaves Wim and the boys falling between two stools - the European Union as a marketplace where members wish to trade freely and the European Union as a currency region that has lost the confidence of those members who voted for the single currency.

Both sides probably had misgivings back in January 1999 and those misgivings have increased in proportion to the euro's miserable performance since then. A 27 per cent decline was never supposed to be on the cards, which means that nobody is happy now and, despite their attempt at intervention, the ECB is damned no matter what it does. Traders are obviously wary about further intervention, which has stopped them selling the currency more aggressively, but sentiment regarding the euro is still negative and capital flows continue to be out of rather than into the euro zone.

Many dealers think that the ECB will be happy enough just to have stemmed the euro's downward momentum at the moment, which is probably the case, although not exactly a cause for breaking out the champagne.

Nevertheless it still makes the interest rate decision a difficult one. (It's been a long time since anyone on the ECB board had an easy decision to make!) Because the currency has continued to decline since the end of last year, much of the value of the interest rate hikes they've made since then has already been wiped out.

This means that the ECB probably still regards monetary conditions as being too lax and this is why they like the idea of further rate hikes. The fact that oil prices are still high, coupled with the fall in the euro's value, has kept the euro zone inflation rate above the 2 per cent target set by the ECB, so the usual spectre of runaway inflation haunts everything Wim and his colleagues do.

It almost makes me feel sorry for them, but that's difficult too - there have been warning signals along the way and their condescending attitude towards the markets over the 21 months has been reflected in the markets' hard-line attitude towards the euro throughout that time.

Which is all very well but it makes life difficult for euro zone companies doing business with the US and the UK. And many European companies do a lot of business with the UK despite the fact that you'd sometimes think they don't!

I suppose the only importing business I've any experience in is the book trade - and that only peripherally, as it's bad enough writing the damn things without having to worry about the pricing structure too. However, UK publishers are having a nightmare placing books in overseas markets and Irish booksellers are forced to grit their teeth as they slap another 25 per cent or so onto sterling prices before stacking the shelves here.

It's one of the easiest ways that we can see the impact of the euro's decline against the UK currency because the sterling price is already printed on the jackets. The Irish branch of the Booksellers' Association is constantly trying to have those prices removed from the jackets because it thinks that a higher Irish pound price stuck over the sterling one makes consumers feel hard done by.

Which is actually a valid point because when it comes to other goods like food or clothes or jewellery we don't see the price differential, only the bottom line. But, on books, it's clearly defined and, much as you want to blame retailers for every difference in price, you can't blame them for this.

That's the kind of thing that caused the Danes to give the euro the thumbs down and which should be causing the ECB to do some really hard thinking in the days ahead. But I'm not sure that they're capable of hard thinking anymore. And it's not only the Danes that have upset the apple cart. The euro was always a difficult sell in the UK, with the great British public wanting to "save the pound" and all that sort of thing, but business executives had seen some merits in a single currency zone.

However, they've had a bit of a re-think recently, which won't make the Tuscany-loving Blair government feel too happy. At this point, according to a Financial Times survey, 33 per cent of them are against the idea compared with 21 per cent last year and 11 per cent two years ago.

Meanwhile, the euro's decline hasn't gone unnoticed in the States either.

Some of the US multinationals are issuing profits warnings because of the weakness of their European earnings. Companies like Colgate-Palmolive and Gillette, who have a big overseas exposures - both of them earn more than 60 per cent of revenues outside the States - have warned that earnings will be down due to currency-related factors.

That's caused damage to their share prices too (Colgate is down about 32 per cent in the year to date). The thing is that those multinational companies are doing quite well in Europe as a region, it's just that when you translate the profits back into dollars things don't look as rosy.

It's no good their reporting back to shareholders that they're doing brilliantly in selling goods when those sales are not being translated back into bottom-line profitability. Shareholders don't care why their company isn't doing well, they want results.

So US investors are getting hurt by the euro's decline too, which is probably why when the Federal Reserve intervened along with the ECB, it spent around $1.3 billion.

Rather horribly, though, it looks as though they'll have to spend a lot more before they convince anyone else of the benefits of a single currency zone for Europe, despite the real convenience that seeing prices in euros in a variety of European shops actually brings. And sometimes doing something too late is worse than doing it at all.

Meanwhile, those higher prices aren't doing us any good in Ireland either. The economic environment that spawned the tiger economy might just be the same one that eventually rips out its claws.