Finance news

French Finance Minister Christine Lagarde said she hoped the warning from the Group of Seven nations against “sharp fluctuations'' in currencies will strengthen the dollar.

“I hope this concerted wording on currencies will help,'' she said in a Bloomberg Television interview in Washington yesterday when asked how worried she was by the dollar's slide.

Finance ministers and central bankers from the G-7 yesterday signaled concern about the dollar's drop by saying that recent movements in exchange rates may hurt the global economy. The dollar has slumped 8 percent against the euro and 6 percent versus the yen since the officials last met in Tokyo in February.

The statement released after talks marks the first “significant change'' in the G-7's currency stance in four years, Lagarde said. “It clearly reflects changes that have occurred in the market since the last meeting,'' she added.

President Nicolas Sarkozy's government recently stepped up complaints that the euro's appreciation against the dollar is pushing France-based companies, including planemaker European Aeronautic, Defence & Space Co., to cut jobs at home and relocate some activities abroad.

`Suffocating' Impact

Paris-based Hermes International SCA, the maker of Kelly and Birkin handbags, is running out of room for price increases to counter declines in the dollar, Chief Executive Officer Patrick Thomas said March 20. EADS CEO Louis Gallois told Le Figaro on March 26 that the euro's record high against the dollar is “suffocating.''

The U.S faxless payday advance. currency reached a record low of $1.5913 against the euro on April 10. “Since our last meeting, there have been at times sharp fluctuations in major currencies, and we are concerned about their possible implications for economic and financial stability,'' the G-7 officials said in their statement.

European Central Bank President Jean-Claude Trichet called for “discipline'' on currency markets and said in Washington that authorities will be monitoring them “closely and collaborate'' if needed.

Still, Italian Finance Minister Tommaso Padoa-Schioppa said his country must adapt to the euro's strength because it may not wane.

“The economy has not completely learned to live with a strong currency,'' Padoa-Schioppa told reporters after yesterday's meetings. The International Monetary Fund this week forecast Italian growth of 0.3 percent this year, the weakest in the G-7.

The G-7 also laid out a 100-day plan to strengthen financial-market regulation amid an eight-month credit squeeze. The initiatives “will actually address some of the confusion, the uncertainty and the lack of confidence that prevails on the markets at the moment,'' Lagarde said.

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