The Group of 20 leading rich and emerging market nations have agreed on a co-ordinated effort to reduce global trade imbalances by cutting the US fiscal deficit, reforms to boost growth in Europe and Japan and increasing exchange rate flexibility in Asia.
Finance ministers and central bank governors meeting in Berlin issued no comment on the dollar's fall, which accelerated after the US election.
However, Hans Eichel, German finance minister, said: “I would be lying to say we did not talk about it.”
Eurozone political leaders have become concerned about the euro's rise and what they see as the US administration's lack of commitment to tackling the dollar's weakness.
John Snow, US Treasury secretary, refused to discuss the dollar's decline, saying only that currencies were not on the formal agenda. Mr Snow sought to reassure G20 members of its commitment to halving the US fiscal deficit over four years, bringing it below 2 per cent of gross domestic product.
Alan Greenspan, chairman of the Federal Reserve, said it would be preferable for the administration to make achieving a fiscal surplus its target.
Asian currency intervention has meant the dollar's decline has been concentrated against freely floating currencies.
Reaction to the G20 communiqu? was divided. “If flexibility was the only reference, traders are likely to take this as the light remaining at green to selling the US dollar,” said Ashraf Laidi, chief currency analyst at MG Financial Group in New York.
However, other strategists felt the communiqu? was already priced in to the dollar.
“The dollar has already been sold off in the expectation there would be no G20 intervention and perhaps we'll see a little dollar buying,” said Chris Towner, consultant at risk manager HIFX. The G20 communiqu? broadened the agreement among the Group of Seven leading industrial nations on tackling global imbalances to emerging market countries including China, Korea, Russia, South Africa and Turkey.
China accepted the need for greater exchange rate flexibility, but stressed the need for financial sector reforms as a prerequisite for moving to a floating rate.
Mr Snow has called for structural reforms to promote faster European growth. He repeated the policy line that a strong dollar was in the interests of the US and that currency values should be set in competitive markets.
There has been no indication the US sees the dollar movements as cause for concern at a time when US inflation and Treasury bond yields are low. Additional reporting by Darryl Thomson. //www.news.ft.com