[NYTr] US vetoed mention of falling dollar in G-7's statement

[All the News That Doesn't Fit]

The Telegraph (UK) - Oct 20, 2007
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/10/21/cng7121.xml

U.S. vetoed mention of falling dollar in G-7's statement

by Edmund Conway

WASHINGTON -- European finance ministers this weekend failed in
their bid to slap down the United States for allowing the dollar
to plunge to record lows against the euro.

US Treasury Secretary Hank Paulson vetoed French, Italian and German
proposals to use the final statement from the Group of Seven (G7)
finance ministers meeting to warn of the problems that are facing
Europe due to the falling dollar.

The US currency plunged to a record low against the euro of $1.4319
on Friday, amid market turmoil and falls in share prices around the
world. In New York the Dow Jones dropped 370 points, while in London
the FTSE 100 closed down 1.2 per cent over the week.

The dollar's weakness, fuelled by fears about a potential recession
in America, is making life extremely tough for European exporters.
European ministers had hoped to register the G7's official concern
about this at the meetings in Washington this weekend, but were
vetoed by the US and other members of the G7.

The ministers limited their currency comments to a warning to China
to allow its currency to appreciate. They ordered the Asian giant
to let the renminbi rise faster, amid concerns its peg against the
dollar is one of the root causes of instability in global markets.
Having sent only a skeleton team to the meetings, the Chinese
government is not expected to respond.

Paulson repeated the long-held US mantra that "a strong dollar is
in our nation's interests and currency values should be determined
in a competitive marketplace."

French finance minister Christine Lagarde said: "I hope the market
will hear him. That's not the case today. I hope it changes."
Ministers also promised to do all they could to protect the global
economy amid market turbulence but, in the wake of Friday's sudden
lurch in stock markets, warned that "uneven conditions are likely
to persist for some time and will require close monitoring."

The meeting, attended by Chancellor Alistair Darling, took place
on the fringes of the International Monetary Fund and World Bank
meetings. Several people were injured shortly after it finished
when anti-globalisation protestors marched through the capital.

The G7 communiquC) said: "Our response to recent financial turbulence
must be based on full analysis of its causes."

Despite the rise in oil prices to a record high above $90 a barrel
this week, the statement did not urge oil cartel Opec to raise its
production levels.

Iran also came up. Paulson said: "We discussed ways to deal with
Iran's pursuit of a nuclear capability and ballistic missiles, its
vast financial support to lethal terrorist groups, and the deceptive
financial tactics employed by Iran to evade sanctions and mask
illicit transactions."