Post by Mech on Feb 7, 2004 17:24:00 GMT -5
G7 Agrees Currency Volatility Undesirable
1 hour, 20 minutes ago
By Brian Love
BOCA RATON, Fla. (Reuters) - European officials attending a global finance chiefs' meeting on Saturday said Europe had agreed with the United States that it is time for calm in currency markets and that the dollar has slid far enough against the euro.
European sources who declined to be identified indicated a statement to be issued at the close of formal talks on Saturday would note their concern about "excessive volatility" in currencies -- a nod to euro zone fears that the euro's surge against the dollar could threaten the region's expansion.
The post-meeting statement was also expected to be couched in such a way as to make clear that G7 ministers believe the euro-dollar rate had "adjusted sufficiently," the sources said. However, there was no indication what Japan's position on this will be.
The G7 -- comprising the United States, Britain, Canada, France, Germany, Italy and Japan -- met in Boca Raton against a backdrop of improved global growth since its last gathering in Dubai in September but heightened nervousness that a plummeting U.S. dollar could imperil that by stifling exports in some economies.
The dollar has fallen about 30 percent against the euro in the past two years and about 10 percent since Dubai.
The United States has appeared comfortable with the dollar's fall, which has helped its battered manufacturing sector find its feet and has played well in an election year.
European sources said the Dubai statement's call for "more flexibility" in exchange rates would be reworked to try to make clear to markets that it was never intended to give a green light to selling the dollar against the euro.
While he did not offer any details about what the statement would hold, German Finance Minister Hans Eichel said a consensus was near on how to address currency market swings -- the central issue of the Boca Raton gathering. "I see good chances for a common position (on exchange rates)," Eichel said during a break in the formal talks.
British Chancellor of the Exchequer Gordon Brown was more direct, saying of currency policy talks: "We have had positive and constructive talks that have led to an agreement."
STILL FIDDLING WORDS
Exactly how the consensus might be spelled out in the closing communique that will be scanned intently by financial markets, was still being worked out on Saturday afternoon.
Japan also wants more stable exchange rates -- which would save it money by requiring fewer forays into currency markets -- while reserving the right to buy dollars if needed to keep the yen from rising too rapidly.
Japan's Finance Minister Sadakazu Tanigaki met U.S. Treasury Secretary John Snow before the formal meeting on Saturday and told Snow Japan would continue to act to cap the yen if it moved out of line with the underlying economy.
The G7 finance ministers and central bankers were meeting at a luxurious resort on Florida's "Gold Coast," north of Miami, where million-dollar yachts bobbed at anchor next to the hotel.
Snow on Saturday said he felt the meeting should chiefly focus on sustainable expansion.
"The focus of the conference, from my point of view, will continue to be growth and what we as ministers can do to build support for higher growth in domestic economies of our countries and the economies of the developing world."
European sources said the text of the communique would say the pace of global economic growth remains uneven and urge further structural reform by G7 governments.
Other topics being threshed out ranged from curbs on terror groups to how to spur growth in emerging-market countries.
Argentina may also come in for some heat. G7 officials who requested anonymity said Buenos Aires would be told -- either after the meeting or next week -- to be more flexible with private creditors in slow-moving debt renegotiation talks. Argentina has held firm with an offer of 25 cents on every dollar of nominal debt.
G7 sources said talks will also likely touch on how debt markets in emerging market countries -- which have been providing cheap funding for developing nations of late -- would be affected by rises in benchmark interest rates in the G7 economies.
**
BY BYE DOLLAR....HELLO AMERO
HELLO PAN-AMERICAN UNION....
HELLO NEW WORLD ORDER.
1 hour, 20 minutes ago
By Brian Love
BOCA RATON, Fla. (Reuters) - European officials attending a global finance chiefs' meeting on Saturday said Europe had agreed with the United States that it is time for calm in currency markets and that the dollar has slid far enough against the euro.
European sources who declined to be identified indicated a statement to be issued at the close of formal talks on Saturday would note their concern about "excessive volatility" in currencies -- a nod to euro zone fears that the euro's surge against the dollar could threaten the region's expansion.
The post-meeting statement was also expected to be couched in such a way as to make clear that G7 ministers believe the euro-dollar rate had "adjusted sufficiently," the sources said. However, there was no indication what Japan's position on this will be.
The G7 -- comprising the United States, Britain, Canada, France, Germany, Italy and Japan -- met in Boca Raton against a backdrop of improved global growth since its last gathering in Dubai in September but heightened nervousness that a plummeting U.S. dollar could imperil that by stifling exports in some economies.
The dollar has fallen about 30 percent against the euro in the past two years and about 10 percent since Dubai.
The United States has appeared comfortable with the dollar's fall, which has helped its battered manufacturing sector find its feet and has played well in an election year.
European sources said the Dubai statement's call for "more flexibility" in exchange rates would be reworked to try to make clear to markets that it was never intended to give a green light to selling the dollar against the euro.
While he did not offer any details about what the statement would hold, German Finance Minister Hans Eichel said a consensus was near on how to address currency market swings -- the central issue of the Boca Raton gathering. "I see good chances for a common position (on exchange rates)," Eichel said during a break in the formal talks.
British Chancellor of the Exchequer Gordon Brown was more direct, saying of currency policy talks: "We have had positive and constructive talks that have led to an agreement."
STILL FIDDLING WORDS
Exactly how the consensus might be spelled out in the closing communique that will be scanned intently by financial markets, was still being worked out on Saturday afternoon.
Japan also wants more stable exchange rates -- which would save it money by requiring fewer forays into currency markets -- while reserving the right to buy dollars if needed to keep the yen from rising too rapidly.
Japan's Finance Minister Sadakazu Tanigaki met U.S. Treasury Secretary John Snow before the formal meeting on Saturday and told Snow Japan would continue to act to cap the yen if it moved out of line with the underlying economy.
The G7 finance ministers and central bankers were meeting at a luxurious resort on Florida's "Gold Coast," north of Miami, where million-dollar yachts bobbed at anchor next to the hotel.
Snow on Saturday said he felt the meeting should chiefly focus on sustainable expansion.
"The focus of the conference, from my point of view, will continue to be growth and what we as ministers can do to build support for higher growth in domestic economies of our countries and the economies of the developing world."
European sources said the text of the communique would say the pace of global economic growth remains uneven and urge further structural reform by G7 governments.
Other topics being threshed out ranged from curbs on terror groups to how to spur growth in emerging-market countries.
Argentina may also come in for some heat. G7 officials who requested anonymity said Buenos Aires would be told -- either after the meeting or next week -- to be more flexible with private creditors in slow-moving debt renegotiation talks. Argentina has held firm with an offer of 25 cents on every dollar of nominal debt.
G7 sources said talks will also likely touch on how debt markets in emerging market countries -- which have been providing cheap funding for developing nations of late -- would be affected by rises in benchmark interest rates in the G7 economies.
**
BY BYE DOLLAR....HELLO AMERO
HELLO PAN-AMERICAN UNION....
HELLO NEW WORLD ORDER.