MercoPress. South Atlantic News Agency

US dollar February summit in Florida

Finance Ministers and heads of Central Banks of the seven more industrialized countries of the world, G-7, will be meeting next 6/7 February in Boca Ratón, Florida, according to a release from the US Treasury Department.

The meeting will be presided by US Treasury Secretary John Snow since the US chairs G-7 in 2004. Other members of the group include United Kingdom, France, Japan, Canada, Italy and Germany. Other participants of the meeting will be representatives from the European Union and from the Euro Zone.

Although no agenda has been anticipated the continuous debilitating US dollar is expected to figure top of the list.

The widening US trade and current account deficits, low interest rates and the threat of terrorist attacks have seen the greenback slide to an all time Euro low, eleven year low against the UK pound and a significant drop against the Japanese yen.

The pound on Monday reached 1,82 US dollars and the Euro 1, 2805 US dollars, and apparently heading for the psychological level of 1,30. Gold reached its highest since 1988, 425 US dollars an ounce.

The "soft" US dollar policy, with record low interest rates, are stimulating the US economy, making exports cheaper and hopefully generating employment in a crucial year for president George Bush's chances of re-election.

However in the European Union there are growing warnings that the Euro rally will have an impact and probably hamper hopes for an upturn of Euro-zone activity.

Another thorn for the US and its currency is the ever growing Chinese trade surplus with the US, which in 2003 rose 29% to 115 billion US dollars. China is now US second trade partner behind Japan.

China with its currency the yuan artificially tied to the greenback, according to US critics, has been repeatedly accused of generating growing job losses in US industry, forcing Washington to cap Chinese export growth to 7,5% annually.