Eurogroup's Juncker calls for stronger dollar

The United States should take measures to strengthen the dollar as its weakness against the euro is causing great concern in the 13-nation currency area, Eurogroup Chairman Jean-Claude Juncker said on Friday.
Juncker told Reuters that European leaders planned to discuss fundamental economic imbalances at a meeting on October 19-22 of the Group of Seven (G7) most industrialised nations. "It is right that we have begun to have great concern about the exchange rate of the euro against the dollar," he said.
His unusually strong comments on currency levels mark a clear change of tone from September 14, when he told reporters after a meeting of euro zone finance ministers in Porto that he was more worried when the euro was weak. But the euro was then at $1.3920 and by Friday the single currency rose to $1.4250.
"It is right that we would like that the intention of the US government to make a strong dollar should be translated more into action, which would mean that the United States would have to act in a way to reduce the balance of payments deficit," Juncker said. "And that our Chinese and Japanese friends consider in a more consequent way that the fundamentals ... are reflected in exchange rates," added Juncker, Luxembourg's prime minister, who was speaking ahead of an evening conference.
The dollar fell after economic data that supported expectations that the Federal Reserve would cut interest rates again to shore up sluggish economic growth. The outlook in the eurozone is still for stable or even higher interest rates.
"I am more worried than I was three days ago," said Juncker, who chairs monthly meetings of eurozone finance ministers and the European Central Bank on economic policy discussions. In recent days, Juncker had said the Eurogroup was attentively following exchange rate developments and repeated a G7 mantra that excessive volatility was undesirable and that exchange rates should reflect economic fundamentals.
The next Eurogroup meeting, devoted to working out a common position ahead of the G7 meeting, is on October 8 in Luxembourg. "The handling of fundamental imbalances will without a doubt make up part of the European issues raised at the G7," he said.
Juncker sought a stronger response to the weakness of the yen against the euro already at the G7 meeting in February, but the United States was against that. The euro/dollar rate was not discussed because at $1.30 then it did not raise concern.