Finance chiefs from the richest nations on earth have agreed a global recovery is gaining steam and they have papered over tensions on currency exchange rates by warning markets "excess volatility" should not to be tolerated.
As finance ministers and central bankers from the Group of Seven wrapped up a two-day meeting at a plush Florida resort, they sought to calm worried currency markets and to offer a balm to Europeans worried their rising euro could hurt growth.
"Excess volatility and disorderly movements in exchange rates are undesirable for economic growth," the G7 said in a closing communique on Saturday. "We continue to monitor exchange markets closely and cooperate as appropriate."
The statement by the United States, Britain, Canada, France, Germany, Italy and Japan was a calculated effort to counter the impact of their announcement in Dubai last September urging "more flexibility" in currencies - which prompted a dollar sell-off that took its value down 10 percent against the euro.
But analysts said while the statement may give pause to markets in the short term, it will not change a longer term downward trend for the dollar stemming in part from record US budget deficits.
"I think we are much closer to intervention," said Marcel Kasumovich, a foreign-exchange strategist with Merrill Lynch in New York, referring to the possibility that a continued appreciation in the euro's value could lead Europe to counter it by selling the currency and buying dollars.