The Group of Seven finance ministers, meeting in Berlin, said in a statement that "major misalignments" in world currencies had been corrected over the last two years and called for currency stability.
But observers said it was significant that no agreement had been reached on any practical measures to halt the dollar's rise, such as the now discredited Louvre accord 10 years ago, which attempted to keep currencies within defined target zones. German Finance Minister Theo Waigel said: commented: "The Berlin message is not comparable ... to the Louvre accord."
The official statement noted that the seven nations, Britain, Canada, France, Germany, Italy, Japan and the United States, had agreed to "monitor developments in exchange markets and to co-operate as appropriate". But while leaving open the prospect that they could intervene to drive down the dollar at some stage, finance ministers made clear that was not on their minds just now.
The Chancellor of the Exchequer, Kenneth Clarke, made the position clear. "We reached no agreement of that kind today. We didn't think it was necessary. We don't have any set targets for the exchange rate of any currency."
Curbing the dollar would benefit US exporters, who are being priced out of world markets, and help Germany to maintain low interest rates at a time of economic weakness. But it is Japan which is suffering most from the US currency's rise. Since the dollar's rally began in the second quarter of 1995, it has risen a massive 55 per cent against the yen to around 123 yen, a four-year low, compared with a gain of 23 per cent against the German mark to around DM1.66.
Any further falls against the yen could threaten the financial position of the country's banks. Japan was the only nation which showed any reluctance to support the agreed G7 line over the weekend, talking about the yen's recent fall as being "rather rapid". Even so, Hiroshi Mitsuzuka, the country's Finance Minister, declared himself "quite satisfied" with the outcome of the meeting.
But economists saw little to emerge which would prevent the onward march of the dollar. "I think it will be the Clarke and Tietmeyer comments that the market will latch on to more than anything else," said David Coleman, chief economist at CIBC Wood Gundy.