G-7 Signals Concern on Dollar's Slide, Weaker Growth (Update2)
By Simon Kennedy and John Brinsley
April 12 (Bloomberg) -- Finance chiefs from the Group of Seven nations signaled concern on the dollar's slide and said the global economic slowdown may worsen amid an ``entrenched'' credit squeeze.
``Since our last meeting, there have been at times sharp fluctuations in major currencies, and we are concerned about their possible implications for economic and financial stability,'' the G-7's finance ministers and central bankers said in a statement after talks in Washington yesterday.
The officials downgraded their outlook for the world economy from that of two months ago, blaming the U.S. housing recession, credit-market turmoil, commodity prices and inflation pressures. The dollar has lost 8 percent against the euro and 6 percent versus the yen since the G-7 last met in Tokyo in February.
``They ratcheted up the currency rhetoric a notch or so,'' said Marc Chandler, global head of currency strategy at Brown Brothers Harriman & Co. in New York. ``They're trying to buy some time for the dollar.''
The new language was the first significant change in the G- 7's view of currencies since a February 2004 meeting in Boca Raton, Florida. The U.S. currency reached a record low of $1.5913 against the euro this week.