WASHINGTON, Dec 8 - With the dollar plumbing record lows against the euro, Treasury Secretary John Snow on Monday declined to speculate about possible intervention to support the U.S. currency and said faster U.S. growth was the key to helping the global economy. In an interview with , Snow repeated U.S. backing for a strong dollar and turned aside questions on whether he would rule out the possibility of currency intervention. The dollar on Monday hit a record low against the euro and a three-year low against Japan's yen as worries grew about America's ability to fund its swelling current account gap. "It won't surprise you to hear me say that we never comment on the level of the currency," Snow said when asked why he thought the dollar was sliding despite mounting signs U.S. economic activity was accelerating. A plunging U.S. dollar could hurt growth prospects for major trading partners such as Europe by making their goods more costly for American consumers. "Of course, our policy on the dollar also has been articulated over and over -- we favor a strong dollar and we feel that currencies' exchange value is best set in open, competitive currency markets where demand and supply forces are allowed to play out," Snow said. As for ruling out intervention under any circumstances: "I'm just not going to deal with it (the question of intervention)," he said. "I'm just not going to speculate on what we might do under some hypothetical circumstances that I can't foresee."
FEAR MISINTERPRETATION
"I just don't believe it's a good idea to speculate -- you might create misinterpretations which is one thing you want to avoid," Snow said when asked if there was any situation in which the United States might consider intervention. The Treasury chief said he was not concerned about America's ability to attract capital to fund the deficit in its current account, the broadest measure of trade because it includes investment flows. But he emphasized other countries needed to spur their growth, which would in turn make them more attractive investment sites. "That would be helpful on a current-account basis and it would create more disposable income in those countries ... (so) there would be bigger markets for what we sell," Snow said. A faster-growing U.S. economy has made American markets alluring for European and Asian exporters, aggravating the U.S. deficit on trade with the rest of the world and creating anxiety in currency markets. When asked if the plunging dollar could hurt Europe's growth prospects, Snow simply said the United States had done its bit to bolster the global expansion. "We've taken the steps that really help their growth because the most important things (for) their growth rate is the U.S. growth rate (which) has now gotten back onto a good path," Snow said.
NEED SOME HELP
"So we've taken the steps that are most important to Europe, most important to Asia, to promote their growth," he said. "We're doing the single most important thing we can do for growth in the rest of the world, far and away the most important thing, and that is to get our own house in order, get the American economy really working and it's on that path." Stronger growth abroad "very well could be" the answer to shrinking the U.S. current account gap, Snow said, referring to the factor most often cited as the major reason for the dollar's weakness. "Lots and lots of things drive current account but one thing that clearly affects our ability to export is disposable income in other countries," he emphasized. "If they have disposable income, our manufacturers, our producers, our firms, our businesses are going to have a more vibrant market to sell into. So I'm very interested in seeing the rest of the world growing."//