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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (6827)	2/3/2004 11:48:29 AM
From: Haim R. Branisteanu	Read Replies (2) \| Respond to of 110194

Germany's Rogowski Urges G-7 to Help Stem Dollar Fall (Update2) Feb. 3 (Bloomberg) -- German companies are pressing Finance Minister Hans Eichel to seek an agreement with the U.S., Japan and Europe on the need to stem the dollar's decline, the head of the country's biggest industry group said. Finance ministers and central bankers of the Group of Seven industrialized nations will meet in Boca Raton, Florida, on Friday and Saturday. European policy makers have said they are concerned the euro's gains will erode an export-led recovery. European Central Bank President Jean-Claude Trichet last month voiced misgivings about ``brutal moves'' in currency markets. ``I won't waste a chance to tell Eichel our concerns when I meet him this afternoon,'' Michael Rogowski, head of the BDI industry group representing 107,000 companies including Siemens AG and DaimlerChrysler AG, said after a televised interview with Bloomberg News in Berlin. ``I am absolutely sure they will discuss currency matters intensively'' at the G-7 meeting in Florida. The dollar has shed 10 percent against the euro since the last meeting of G-7 finance chiefs in Dubai in September, when they called for ``more flexible'' foreign-exchange rates. Investors interpreted that statement as a signal governments were willing to let the dollar weaken further. The euro was trading at $1.2549 at 4:42 p.m. Frankfurt time. The single currency reached its record of $1.2898 against the dollar on Jan. 12. ``Worried About Weakness'' ``The least I expect is that finance ministers, including the U.S., will come to a common statement saying they are worried about the dollar's weakness and that this development won't continue,'' Rogowski said. Without a statement on the dollar ``I expect the markets will then test the dollar again, so we would see a further devaluation,'' he said. The U.S. may resist a common statement that would risk triggering a rise in the dollar as President George W. Bush prepares to run for reelection in November, Rogowski said. ``The U.S. is probably interested in a relatively low exchange rate of the dollar as this supports their economy,'' he said. Still, Germany and the U.K. will push for greater stability in currency markets at Boca Raton, he said, citing recent talks with the finance ministers of both governments. Rogowski will meet Eichel in Berlin tonight and had talks with U.K. Chancellor Gordon Brown in London on Jan. 19, the same day that he met Digby Jones, director-general of the Confederation of British Industry, BDI spokeswoman Anke Schultheiss said. To help stem the euro's appreciation and avert further damage for exports, the European Central Bank should lower interest rates by as much as 50 basis points, Rogowski said. ``Inflation is not a threat at the moment,'' he said. The ECB has kept its main refinancing rate at 2 percent, the lowest in more than half a century, since June.