Saguaro
10-11-2007, 07:13 PM
WASHINGTON (Reuters) - Treasury Secretary Henry Paulson said on Thursday he backs a strong dollar, reaffirming long-standing policy and addressing concerns in Europe that a soaring euro may undermine economies there.
"A strong dollar is in our nation's interest and the currency values should be set in a competitive marketplace based upon underlying economic fundamentals," Paulson told Reuters as he left a meeting with President George W. Bush.
The comment came ahead of an October 19 meeting of finance ministers and central bankers of the Group of Seven major industrial nations, where currencies will be a priority topic.
The dollar hit a lifetime low against the euro last week and has also recently plumbed record lows against a basket of major currencies (.DXY).
European policy-makers have worried a stronger euro will dampen growth in Europe by making its exports more expensive, and some had urged Washington to reaffirm its long-standing view on the benefits of a strong dollar.
Finance ministers from Europe's common currency area, worried about the euro's relentless rise in value, rated the dollar among their top concerns at a meeting in Luxembourg on Tuesday.
Paulson on Thursday was repeating a polished currency mantra that he -- as well as his immediate predecessor in the Bush administration -- has drawn on time and again. He last used the formulation in Canada on September 21 after a meeting with Canadian Finance Minister Jim Flaherty.
Officials at the Federal Reserve noted that U.S. inflation risks could be heightened if the dollar were to continue to depreciate significantly, according to minutes of their September 18 meeting.
The dollar has tumbled in value in recent weeks as investors have anticipated the Fed would cut interest rates to buffer the U.S. economy from a prolonged housing slump and credit crisis. The Fed trimmed benchmark borrowing costs by a half-percentage point to 4.75 percent on September 18.
At the same time, the weaker dollar has been giving a lift to U.S. exports, helping to shrink the massive U.S. trade deficit and supporting the economy's growth.
http://news.yahoo.com/s/nm/20071011/bs_nm/usa_economy_paulson_dollar_dc;_ylt=Ak9IMwI1mDFvpuz ix..VpuuyBhIF
"A strong dollar is in our nation's interest and the currency values should be set in a competitive marketplace based upon underlying economic fundamentals," Paulson told Reuters as he left a meeting with President George W. Bush.
The comment came ahead of an October 19 meeting of finance ministers and central bankers of the Group of Seven major industrial nations, where currencies will be a priority topic.
The dollar hit a lifetime low against the euro last week and has also recently plumbed record lows against a basket of major currencies (.DXY).
European policy-makers have worried a stronger euro will dampen growth in Europe by making its exports more expensive, and some had urged Washington to reaffirm its long-standing view on the benefits of a strong dollar.
Finance ministers from Europe's common currency area, worried about the euro's relentless rise in value, rated the dollar among their top concerns at a meeting in Luxembourg on Tuesday.
Paulson on Thursday was repeating a polished currency mantra that he -- as well as his immediate predecessor in the Bush administration -- has drawn on time and again. He last used the formulation in Canada on September 21 after a meeting with Canadian Finance Minister Jim Flaherty.
Officials at the Federal Reserve noted that U.S. inflation risks could be heightened if the dollar were to continue to depreciate significantly, according to minutes of their September 18 meeting.
The dollar has tumbled in value in recent weeks as investors have anticipated the Fed would cut interest rates to buffer the U.S. economy from a prolonged housing slump and credit crisis. The Fed trimmed benchmark borrowing costs by a half-percentage point to 4.75 percent on September 18.
At the same time, the weaker dollar has been giving a lift to U.S. exports, helping to shrink the massive U.S. trade deficit and supporting the economy's growth.
http://news.yahoo.com/s/nm/20071011/bs_nm/usa_economy_paulson_dollar_dc;_ylt=Ak9IMwI1mDFvpuz ix..VpuuyBhIF