Unexpectedly quiet on the G-8 jawboning front:
FOREX-Dollar slips after G8 ministers silent on currencies
Sun Jun 15, 2008 7:20pm EDT
WELLINGTON, June 16 (Reuters) - The dollar slipped in early trade on Monday on disappointment that finance ministers from the Group of Eight (G8) countries failed to address the weakness of the U.S. currency at a meeting over the weekend in Japan.
Many traders had expected ministers to discuss currencies after a series of comments linking a weak dollar and rising oil prices, but most appeared more worried about slowing growth in economies hit by a credit crisis.
"The G8's focus was clearly not on currencies as markets had anticipated," said Khoon Goh, senior economist at ANZ-National Bank.
"Many were expecting a least some mention in the communique given the effect a weak USD has on commodity prices and therefore, on global inflation."
At 2300 GMT the euro <EUR=> was at $1.5387/91 compared with $1.5360 in late U.S. trade on Friday when it hit a one-month low of $1.5304.
The dollar was little changed at 108.26/27 yen <JPY=> against 108.20 yen.
Last month, the Dallas Federal Reserve said the U.S. currency's slide had contributed about one-third of a $60 increase in oil prices between 2003 and 2007.
French Economy Minister Christine Lagarde said dollar weakness and commodity price inflation were inextricably linked.
Paulson said on Saturday he disagreed, and stuck only to his oft repeated line that the United States supported a strong dollar.
Markets have long interpreted U.S. dollar policy as one of "benign neglect" -- speaking of the virtues of a strong currency while profiting through export growth from its weakness.
Earlier in the month, Federal Reserve Chairman Ben Bernanke flagged a change by linking the weaker dollar to inflation, saying he was watching the currency closely with the Treasury.
Paulson then refused to rule out intervention, helping the U.S. dollar post its biggest one-week gain against the euro in three years. (Reporting by Kazunori Takada)
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