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12/03/2004
Dow Jones News Services
(Copyright © 2004 Dow Jones & Company, Inc.)


NEW YORK (Dow Jones)--U.S. Treasury Secretary John Snow reiterated Friday that the Bush administration has a strong dollar policy.

Snow's comments, made in an interview with CNBC, came as the dollar sat at an all-time low against the euro and near a four-and-a-half year low against the yen.

Asked if the administration has a policy of benign neglect toward the U.S. currency or if it still has a strong dollar policy, Snow said,"Well of course, there has been (a strong dollar policy) and it continues. It's the rock solid foundation of our policy."

In the interview, Snow would not comment on reports that European and Japanese authorities may be considering intervention to slow the dollar's decline.

He said that an agreement had been reached at the meeting of the Group of 20 industrial and developing nations last month that the best way to deal with the U.S. current account deficit is for the U.S. to reduce its budget deficit, U.S. trading partners to grow their economies more, and for there to be"greater currency flexibility" in other countries.

He said this"broader approach" would create the"orderly adjustment process that's called for."

In the meantime, Snow said the administration believes that"currency values are best set" in open markets where capital flows freely, he said.

The twin U.S. budget and current account deficits have been the most widely cited reason for the dollar's recent decline.


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Commenting on the weaker-than-expected November nonfarm payrolls data released Friday morning, Snow said"the important thing is that the upward path continues," noting that November was the 15th straight month of payrolls growth.

Earlier Friday, the U.S. Labor Department reported non-farm payrolls grew by a lackluster 112,000 last month after a robust 303,000 increase in October. The numbers surprised Wall Street, where analysts had predicted a 200,000 gain. Treasury yields and the U.S. dollar declined on the news.

Snow said that with the"strong growth" the U.S. is enjoying,"lots of good jobs" will be created.

Snow also said he was not worried about inflation.

"We still have very high productivity. Most firms still find they aren't able to sustain price increases."

Snow would not comment on whether he will remain in his post during President George W. Bush's second term. He said that's a matter to be discussed only between him and the president.

-By Laurence Norman, Dow Jones Newswires; 201-938 2096; laurence.norman@dowjones.com