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Wall Street Roundup

EU lauds U.S. statement backing dollar

October 09, 2007|From Times Wire Services

Irked by the rise in the euro, European finance ministers Monday welcomed Washington's statements that a strong dollar was in the economic interests of the U.S.

The finance chiefs of the 13 countries that use the euro as their currency also called on Beijing to allow the yuan to appreciate against the euro and said top European officials would travel to China this year to discuss the matter with their counterparts.

"In emerging economies with large and growing current-account surpluses, especially China, it is desirable that effective exchange rates move so that necessary adjustments will occur," Jean-Claude Juncker, Luxembourg's prime minister and finance minister, said at a news conference after chairing the meeting in Luxembourg.

Juncker will travel to China with European Central Bank President Jean-Claude Trichet and the European Union's monetary affairs commissioner.

Juncker did not join some ministers, such as Germany's Peer Steinbrueck, in saying a strong euro reflected a strong European economy that could ride out problems.

Europe is starting to feel the bite as the U.S. dollar plummets, making French wine, Italian fashion and German cars more expensive in the U.S., the EU's main export market.

Last week, employer group BusinessEurope said that the euro, trading at more than $1.40, had crossed a "pain threshold" for European companies. On Monday, the euro edged down to $1.405 from $1.414 late Friday.

The European Commission, the EU's governing body, contends the euro has already paid off by making the region more resilient to outside shocks, such as last year's oil price spikes.

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