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To: Pogeu Mahone who wrote (276615)	2/8/2004 8:39:28 AM
From: Pogeu Mahone	Respond to of 436258

Compromise on dollar's fall US, Europe agree on G-7 document By Martin Crutsinger, Associated Press, 2/8/2004 BOCA RATON, Fla. -- The United States and its allies softened differences yesterday over whether to let the dollar fall freely under market pressures or prop it up with government intervention. A joint statement allowed all sides to claim at least partial victory. The Bush administration won support for retention of language supporting "more flexibility" in exchange markets, a phrase first used by the Group of Seven wealthy countries last September. The G-7 endorsement of flexibility has been interpreted by currency traders as giving them a green light to push the exchange value of the dollar lower, without fear that the United States or other members of the G-7 would try to fight the moves with massive government intervention. The administration is counting on a declining value of the dollar to boost US exports by making them cheaper on foreign markets. Stronger export sales are expected to lift the fortunes of battered US manufacturers, who have laid off 2.8 million workers over the past 3 1/2 years. But to meet complaints of European countries that the dollar's decline has been too rapid and too severe and is threatening their companies' export sales, the G-7 inserted a new phrase expressing concerns about "excess volatility and disorderly markets." Europe hopes that phrase will serve as a warning that some countries may be willing to intervene in currency markets to fight too large a decline in the dollar. The compromise language was included in the final communique issued at the end of two days of contentious talks over the best approach to take to deal with a dollar that has slumped to record lows in recent weeks against the euro, the common currency of 12 European countries. "We all agreed to it," Treasury Secretary John Snow said at a closing news conference in response to a question about the language involving currencies. "We all found it appropriate." The G-7 countries -- the United States, Japan, Germany, France, Britain, Canada and Italy -- proclaimed that the global economic recovery has "strengthened significantly" in recent months. The finance officials endorsed continued cooperative efforts to promote sustained global growth and pledged support in efforts to cut the foreign debt burdens of Iraq and Afghanistan. © Copyright 2004 Globe Newspaper Company. © Copyright 2004 The New York Times Company