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		Home Page Mortgage News You Can Use G7 Seeks Consensus on Coping with Dollar Saturday February 7, 9:58 am ET By Luca Trogni and Shinichi Kishima BOCA RATON, Fla. (Reuters) - World financial leaders meeting in Florida face the tough job on Saturday of agreeing on wording on foreign exchange amid worries the U.S. dollar's steady slide could spin out of control. While comforted by the sharp recovery of the global economy over the past six months, many of the finance chiefs and central bankers from the Group of Seven club of wealthy nations are anxious about the potential currency fallout from huge U.S. trade and budget deficits. The dollar's deficit-driven slide has accelerated since the G7's last meeting in Dubai in September concluded that more flexible currency policies were needed around the world. Ministers have expressed concern, however, that this statement was targeted at Asian countries like China, who fix their currencies to the dollar, and many want to clarify the statement in Boca Raton. Italy's Finance Minister Guilio Tremonti said European ministers may push to alter the Dubai statement to specify greater flexibility in Asian currencies and not the euro, which has risen about 10 percent against the dollar since then. "The hypothesis from the European side is referring to the need for more flexibility of Asian currencies," he told reporters before the meeting on Saturday. European G7 members, whose exporters have been stung in recent months by the euro's surge to record highs against the dollar, said on Friday they wanted the group to agree to caution markets against further extreme currency swings. Japan also called for more stable exchange rates while reserving the right to intervene in markets to cap the yen. But Japan may oppose any broad reference to Asian currency flexibility because this would be seen by markets as a rebuke from G7 for Japan's unilateral intervention. Japan's Finance Minister Sadakazu Tanigaki met U.S. Treasury Secretary John Snow before the G7 meeting got underway on Saturday and said he told Snow Japan would continue to act to cap the yen if it moved out of line with the underlying economy. "If there are speculative moves that go beyond that we will take appropriate action," he told reporters. DEBATE IN LUXURY The G7 finance chiefs, from the United States, Japan, Germany, France, Britain, Italy and Canada, are meeting in an 80-year-old hotel on Florida's lush "Gold Coast" just north of Miami. Million-dollar yachts bobbed at anchor on waterways next to the hotel as the finance ministers and central bankers debated how to keep expansion among the world's wealthy nations on track while lending a hand to the poorest to rebuild nations like Iraq and to keep terrorism at bay in the Middle East. Snow on Saturday said a meeting of finance chiefs from the world's leading economies later in the day would focus on ensuring sustained global growth. "The focus of the conference, from my point of view, will continue to be growth and what we as ministers can do to build support for higher growth in domestic economies of our countries and the economies of the developing world." G7 sources on Saturday said pledges to rein in national budget shortfalls were likely to be a central feature of the group's final communique. This would form part of the U.S.-led initiative on ways to sustain the recovery in the world economy. The sources said the essence of the Dubai statement on flexible exchange rates was likely to reappear but the wording was still being discussed and may also address members' concern about excessive volatility on currency markets. "We are all trying to find a common position," Germany's Finance Minister Hans Eichel said on Saturday. Couching a joint statement this time is proving tricky, with the United States happy with the boost a weaker dollar gives its own exporters -- especially in an election year -- and apparently unfazed by the pain it may cause elsewhere. G7 sources said the communique's wording would not be finalized until later on Saturday. Ministers said central bankers would be closely involved in that process. Ministers began formal discussions at 9:00 a.m. (1400 GMT) on Saturday and are expected to issue a final statement around 5 p.m. (2200 GMT). Ministers also will discuss emerging economies, progress on tracking terror-related funds and the reconstruction of Iraq. Argentina may face some pressure to be more flexible in its slow-moving debt renegotiation talks with private bondholders. G7 sources said there was also likely to be a discussion on how the debt markets in emerging market countries, which have been providing relatively cheap funding for developing nations of late, would be affected by rises in benchmark interest rates in the G7 economies. Back to Original Article: Mortgage News You Can Use   Continue with: Treasurys Close Sharply Higher on Weak Job Growth Job Growth in January Disappoints US TREASURY OUTLOOK-Greenspan testimony, Treasury refunding Stocks Could Slip as Earnings Taper Off Time to Be Choosy as Rally Stalls EARLY STAGES OF RECOVERY
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