Europe and US send mixed signals on forex action need

European and US officials gave conflicting signals about the need for action to curb volatile exchange rates on Monday as the world's industrialised countries prepared for a key meeting next month.
European Central Bank President Jean-Claude Trichet was quoted as speaking out against "excessive changes in exchange rates".
But US Under-secretary for Trade Grant Aldonas said the spotlight of the meeting of finance ministers of the Group of Seven in Florida on February 6 and 7 should be concentrated primarily on economic fundamentals.
The euro has shot up 11 percent against the dollar in the past four months, hitting record highs, and setting off alarm bells among euro zone politicians who fear the exports they rely on to lead economic recovery may be badly hit.
"The important thing is not to focus so much on exchange rates but on the underlying economic fundamentals," Aldonas told a seminar in Paris.
Deputy finance ministers and other top officials of the G7 countries - the United States, Japan, Germany, Britain, France, Italy, and Canada - met in Brussels on Sunday evening and Monday morning to prepare for the Florida meeting, according to G7 sources.
Trichet was quoted as restating the eurozone's worry over sharp movements.
"We don't like either excessive volatility nor excessive variations of exchange rates," he said in an interview with Spanish newspaper ABC when asked about the impact of the strong euro on the European economic recovery.
However, with speculation swirling that if the euro rises further the ECB could contemplate cutting interest rates, the bank denied that Trichet had discussed rates with eurozone finance ministers last week.
French minister Francis Mer told a news conference at the World Economic Forum in Davos, Switzerland on Saturday that such a discussion took place.
But Mer's office had no comment after an ECB spokesman said on Trichet's behalf: "The minister of finance of France has been misunderstood. He (Trichet) would like you to know there was no discussion on interest rates (at the January 19 meeting)."
Trichet's concerns about exchange rate volatility were echoed by some of the eurozone finance ministers attending a conference on enterprise in London.