--Eurogroup Chairman Favors Neutral G7 Statement on FX, or None At All

By Yali N'Diaye

BRUSSELS (MktNews) - There is not necessarily a contradiction between the U.S. strong dollar policy and the Eurogroup's call for a strong euro, Eurogroup chairman Didier Reynders told Market News International Monday.
A "neutral" G7 statement on foreign exchange rates could contain both views, without elaboration, or simply avoid the forex issue altogether, Reynders suggested after the meeting of Eurogroup (eurozone finance ministers) here. "We need some neutrality regarding currencies in the G7 statement," said Reynders, who will represent the euro zone at the meeting of G7 finance ministers and central bank heads this weekend. Reynders is also Belgian finance minister.
"I would be content either if the comment (on both currencies) were the same, or if there were no particular mention of G7 currencies," he added.
"I think it's is a good thing that the exchange rate be linked to the strength of the economy -- both in the U.S. and in the euro zone," he said.
(Most analysts expect the dollar to lose ground against the euro as the U.S. economy slows in the first half of this year. Some believe the dollar could rebound, provided the slowdown comes to end by the second half of this year.)
"All the better if the U.S. wants a strong currency on the basis of economic recovery and low inflation," Reynders said. "That's what (Federal Reserve Chairman) Alan Greenspan has announced for the second half. We'll see."
"In Europe," he reaffirmed, "we are confident about growth this year."