LEAGUE CITY, Texas, Feb 19 - Dallas Federal Reserve President Robert McTeer said on Thursday he was not concerned the U.S. dollar had weakened against the euro, the latest in a series of such comments from U.S. central bankers. "I don't worry much about it," McTeer said in answer to a question after addressing a conference sponsored by the Texas Council on Economic Education. "After many years of an overly strong currency, I am not going to cry about the dollar against the euro." The remarks from McTeer, who does not have a vote on the Fed's policy panel this year, joined a string of comments from Fed officials who have shown little discomfort with the dollar's decline. Fed Chairman Alan Greenspan told Congress last week the dollar's drop was not a cause for concern at the moment. "It's not something which we think is something that gives us considerable concern at this point," he said. Earlier on Thursday, Chicago Fed President Michael Moskow had joined the chorus on the dollar's two-year slide, which has sparked unprecedented foreign exchange intervention by the Japanese and talk that the Europeans may soon follow. "I don't see any sign where there is a major concern from a monetary policy standpoint at this point in terms of the outlook for the economy," Moskow said. He said the potential inflationary impact was a risk to be "mindful" of, but that prices were unlikely to rise "significantly." "We believe the effect of slack resources remains predominant at this time and we expect inflation to remain low this year," said Moskow, who also does not have a vote on the Fed's policy committee this year.
FLOAT IT
Expanding further on his views on foreign exchange, the Dallas Fed chief said floating exchange rates were the best currency system, as he waded into the thorny subject of China's policy of pegging its yuan to the U.S. dollar. McTeer said Bush administration calls for a relaxing of China's dollar peg were "inappropriate." However, he said an eventual move by China to float the yuan would be good for its economy as the country grows. "Until recently nobody really questioned the fact that they were tying the yuan to the dollar. It must have taken them by surprise to see us start lobbying them on that score, which I think is probably inappropriate," McTeer said in answer to a question. Since the mid-1990s, China has kept the value of the yuan at about 8.3 to the dollar, irking U.S. manufacturers who have complained of difficulty in competing against inexpensive Chinese exports. Bush administration officials have publicly pressed for a loosening of the tie, and Beijing has agreed to take steps toward that without offering any timeframe. Speaking to reporters after the event, McTeer was asked about the dearth of hiring in the United States. He said he had been expecting jobs growth to pick up more sharply for a number of months, and expressed confidence employment was set to rise. "It's just a matter of time," McTeer said, adding a pick-up would come "sooner or later."//www.reuters.com