Strong greenback in U.S. interest, Paulson says
( Reuters ) - Treasury Secretary Henry Paulson said on Friday that a strong U.S. dollar was in American interests and said he was optimistic the U.S. economy would continue to grow this year.
The Canadian dollar hit parity with its U.S. counterpart on Thursday for the first time in 31 years, in part thanks to a steady decline in the greenback that has also cut its value against the euro. The U.S. dollar continued to trade near a 15-year low against a basket of other currencies on Friday.
"I feel very strongly that a strong dollar is in our nation's interest and we believe currency values should be set in a competitive marketplace based on underlying economic fundamentals," Paulson told reporters after a meeting with Canadian Finance Minister Jim Flaherty.
Paulson, in Canada to sign a new tax treaty between the two countries, also said he was upbeat about the prospects for the U.S. economy.
"The housing slowdown in the U.S. and the capital markets turbulence we're going through right now will take a penalty to our growth, but, again, we're diverse and I'm very comfortable that we're going to continue to grow throughout this year," he said.
"We have an economy where inflation is relatively constrained, and in my judgment that's key to prolonging economic expansion."
Within the past week, Paulson has met fellow finance ministers from France, Britain and Canada to discuss global economic conditions ahead of an October meeting of Group of Seven finance chiefs in Washington.
Flaherty said the international financial community was still working through issues causing market turmoil and deflected questions about the high Canadian dollar, which has risen rapidly to reach parity with the U.S. dollar.