UPDATE: Trichet: Important US Says Strong Dlr In US Interest

UPDATE: Trichet: Important US Says Strong Dlr In US Interest (Updates with more details) WASHINGTON (Dow Jones)--European Central Bank President Jean-Claude Trichet said Friday it was "very important" to hear the U.S. saying a strong dollar is in the country's interest, and he said that the ECB's monetary policy stance has remained unchanged since its last interest rate setting meeting. "We have said that monetary policy must remain vigilant in maintaining price stability," he said at a briefing following the meeting of finance ministers and central bank chiefs of the Group of Seven leading industrial nations, regarding the G7's communique. He said that "there was nothing new" in the ECB remarks at the G7 meeting and "we confirm fully our monetary policy." The ECB left its key policy rate unchanged at 4.0% on Oct. 4; it's likely to stay there through November, analysts say. Speaking at the same press conference, Luxembourg's Prime Minister and Finance Minister Jean-Claude Juncker, who heads the so-called Eurogroup of 13 countries using the euro, said he noted with greatest attention the U.S. strong dollar policy stance. U.S. Treasury Secretary Henry Paulson told reporters following the G7 meeting Friday that "I believe in a strong dollar." Overnight Thursday, the euro hit a fresh all-time high of $1.4320, in part a reflection of the narrowing interest rate differential between the two currencies since the U.S. Federal Reserve cut its key interest rate last month. Trichet also noted that the G7's communique changed its language on China and its currency, the yuan. In the statement, the G7 praises China's decision to increase the flexibility of its currency. But the communique adds that "in view of its rising current account surplus and domestic inflation, we stress (China's) need to allow an accelerated appreciation of its effective exchange rate." Juncker said that he, Trichet and European Commissioner for Economic and Monetary Affairs Joaquin Almunia will visit China Nov. 27-28. Asked about the spike in oil prices, after oil futures set a new record overnight of over $90 a barrel amid tensions in the Middle East, Trichet said that both oil prices and commodity prices pose an upside risk to inflation and a downward risk to economic growth. Juncker said that uncertainty and downside risks to the economy have increased. And while global economic growth should remain robust, the 13 countries sharing the euro will see growth slowing in 2008. He forecasts euro-zone growth of 2.5% for this year and 2.1% for 2008. Juncker added that Japan's finance minister and central bank governor said at the G7 that they believe the Japanese economy is on a sustainable recovery and that exchange rates "should reflect these economic fundamentals." "We are confident that growth developments will be recognized by market participants and will be incorporated in their assessment of risks," Juncker said. "We want the markets to be aware that the risk of one-way bets, and particular on the foreign exchange markets." He was referring to the popular carry trade, in which investors borrow the low-yielding yen and invest in higher-yielding currencies. "We do think that the reduction of the imbalances should be a cooperative process," Juncker said, adding that Europe has played its part by implementing structural reforms. Several euro-zone politicians have said they are worried the strong euro could hurt exports, with some even calling for the ECB to do something to halt the euro's rise. They believe the euro zone is bearing the brunt of the dollar's decline. Turning to recent financial market turmoil caused by defaults on U.S. subprime mortgages, Trichet said there are still lessons to be drawn from this turbulence. The G7 comprises the U.S., Japan, Germany, the U.K., France, Italy and Canada.