The euro remained relatively steady against the dollar after the European Central Bank's president insisted that the US remains committed to a strong dollar policy despite the recent sharp slide in the value of the currency. Jean-Claude Trichet told the European Parliament's economic and monetary affairs committee that he noted "with great attention" that the US authorities have reaffirmed that they see a strong dollar as being in the interest of the US economy. Neil Mackinnon, chief economist at ECU Group, said the upcoming G7 meeting of finance ministers and central bankers will be important to see whether US Treasury Secretary Hank Paulson firms up his comments on the extreme positions and prices in the currency markets. "A falling dollar is not a free lunch," he said. "The US is dependent on foreigners' finance to buy US debt and if they sense a potential dollar crisis it could lead to fresh global market turbulence," Mackinnon added. One of Paulson's most persistent concern about the currency markets has been China's exchange rate policy. Trichet added his voice to calls for China to allow its currency, the yuan, to float more freely in the currency markets. In effect, he is looking for Asian currencies to take some of the strain of a falling dollar from the euro. "In emerging countries with large and growing current account surpluses, and this is the case with China, it is desirable that their effective exchange rates move so that necessary adjustments will occur," Trichet said. "We will engage in dialogue with China," added Trichet, who is due to visit China in the months to come along with Eurogroup president Jean-Claude Juncker and EU Economic Affairs Commissioner Joaquin Almunia to discuss the exchange rate problem. Simon Derrick, currency strategist at Bank of New York Mellon thinks there are two reasons why the trip should not be dismissed out of hand, the first being the People's Bank of China's recent comment about the need for greater co-ordination between currency and monetary policy. "The second reason for keeping a careful eye on this trip is the simple fact that the visitors come from Europe rather than the US," said Derrick. "Simply put, If China is looking to alter its currency policy slightly without wishing to be seen to bow to US pressure then a visit from the Europeans might provide the ideal opportunity to announce it," he added. The main piece of economic news today will be the minutes to the last rate-setting meeting of the US Federal Reserve, when the FOMC surprised the markets by voting for a half point interest rate reduction to offset the effects from the summer's liquidity crisis. "Investors will particularly be interested in whether the Fed views further and deeper cuts will be necessary to stop the housing slump and reflate the economy," said Geoffrey Hu, currency strategist at UBS. "The dollar's best attempts to recover recent losses have been driven by hopes of the US avoiding any recession and as such, an aggressively dovish message may not necessarily be viewed as dollar-negative," he added. Comments from Fed members William Poole and Janet Yellen will also be scrutinised.