US Treasury Secretary John Snow would like to see a communique from today's G7 meeting in Dubai endorse the concept of flexible exchange rates, US Treasury spokesman Robert Nichols has said. Snow "thinks it would be useful if the communique expressed support for flexible exchange rates," Nichols said. The G7 finance ministers and central bank governors will release a closing statement later today. In the past, the communique has reiterated rote language -- "we will continue to monitor exchange markets closely and cooperate as appropriate."
This time, the communique will be closely watched by the currency market, given the US push for China to abandon its fixed exchange rate against the dollar, which is viewed by US manufacturers as artificially low. Earlier this month, Snow pressed China on the issue in a visit to Beijing. He "will continue to push for flexible, market-based exchange rates while he is here," Nichols also said, while adding that the US "did not intend to single out any country" at the IMF/G7 meetings. "We think the world trading system works best under a regime of market-based exchange rates," he explained. //www.fxcentre.com