Financial markets are becoming increasingly doubtful that the Group of Seven industrial powers can agree on how to tackle dollar weakness and the latest comments of policymakers give little indication any such accord is likely.
A Reuters poll of currency strategists showed few expect the group's finance ministers and central bankers to say anything that will stop the euro and yen appreciating after their meeting in Flordia this weekend.
The poll, conducted this week, showed 39 out of 46 strategists thought the dollar would weaken if the G7 stuck to the statement it issued after its summit in Dubai last September, when it urged flexibility in exchange rates.
Only 12 out of 47 thought the G7 was likely to agree alternative phrasing that could weaken the euro and yen.
The dollar's two-year-old retreat, fuelled by bulging US current account and budget deficits, has hurt exporters in Japan and the euro zone, who are struggling to keep their prices competitive.
Haruhiko Kuroda, adviser to Japan's cabinet, said on Wednesday that Japan was likely to reiterate its concerns about the yen's rise at G7, adding: "I don't think the US wants the dollar to fall further."
But the US Treasury Secretary John Snow said on Tuesday that the dollar's exchange rates were "best set in open, competitive markets," fuelling speculation that he will not support any G7 communiqué that questions the speed of euro and yen appreciation.
In Europe on Wednesday, a French finance ministry source said France would press for structural reforms in the United States and Japan, not just the eurozone.
But he was noticeably silent on the issue of currency levels ahead of the G7 meeting on Friday and Saturday.
A European Central Bank member was quoted as saying the euro's strength was having a big impact on exports but that its current levels were not unusual.
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