Eurogroup to voice concern at euro gains at G7-EU sources

By Jan Strupczewski

BRUSSELS (Reuters) - Euro zone finance ministers and the European Central Bank will voice concern on Friday over the euro's recent sharp gains in a message they want to send to the Group of Seven meeting on April 11, EU sources said.

Finance ministers from the 15 countries using the euro-- the Eurogroup -- meet on Friday morning in Slovenia to discuss the economy and prepare their joint message on foreign exchange for G7 meeting in Washington.

"They are likely to say that exchange rates should reflect economic fundamentals and excessive volatility and disorderly movements are undesirable for growth," sources close to the preparation of the Friday meeting said.

"And they are likely to say that in the current circumstances they are concerned about excessive exchange rate movements," the sources said, adding the rest of the message to the G7 will remain as before.

Since the last G7 meeting in February the euro has surged against the dollar from around $1.46 to just above $1.59 on March 17. Over the last 10 days the euro has moved from $1.542 to almost $1.59 and then back to $1.5616 early on Wednesday.

That is why this time, for the first time, the Eurogroup wants its G7 message to reflect concern.

The G7, which groups finance ministers and central bankers from the United States, Canada, Japan, Britain, Germany, France and Italy, issues a statement at the end of its talks.

Markets watch this statement closely, especially the part on exchange rates, because all G7 members agree the wording and it could give the first signal of a deal on concerted action in foreign exchange markets.