Coalition Urges Currency Restraint

By John S. McClenahen Nearly a week after U.S. Treasury Secretary John Snow and the finance ministers of six other major industrialized nations suggested they might intervene to offset unusual swings in currency exchange rates, a Washington, D.C.-based coalition that includes manufacturing groups is urging restraint. "With U.S. exports just beginning to turn around after five long years of bearing the burden of a significantly overvalued [U.S.] dollar, this is not the time to be encouraging government intervention to thwart market mechanisms," Patricia Mears, a spokesperson for the Coalition for a Sound Dollar, said Feb. 12. Prior to last weekend's meeting of the G-7 finance ministers in Boca Raton, Fla., the coalition of 95 industrial and agricultural associations sent Snow a letter stressing, "It is imperative that the administration continue to press our global trading partners to allow the free market to set the value of the dollar and other currencies without intervention." They seemed to be most concerned the European Central Bank would step in to prevent further appreciation of the euro, the common currency for the majority of European Union countries, against the U.S. dollar. Appreciation of the euro has tended to make U.S. exports more competitive in European markets.

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