G-7 finance ministers face dollar concerns

Finance ministers from the Group of Seven rich countries face concerns over the future of the US dollar as they meet today in a forum whose role is increasingly in question.

There was even some uncertainty ahead of the meeting whether the G-7 would issue a joint statement in the wake of the Group of 20's decision in Pittsburgh last week to declare the G-20, which includes developing countries such as China, Brazil and India, as the world's premier economic forum.

That such a possibility even arises gives a further sign that power is shifting from the G-7 to the G-20. The G-7 nations are the United States, Japan, Germany, France, Britain, Canada and Italy.

Despite the question marks, the finance ministers, who will be joined by their central bankers, have a number of issues to discuss as the world economy begins a slow recovery from the deepest recession since World War II.

Chief among these is likely to be the dollar, which has been falling in foreign exchange markets in recent weeks and months. In recent days, it sank to an eight month low against the yen and nearly hit a year-high against the dollar, prompting concerns that a dollar crisis could bring the world recovery to a grinding halt.

The dollar won some respite yesterday ahead of the meeting as higher than expected US job losses for September stoked a flight towards safe haven assets the dollar usually garners support in such situations.