UPDATE 1-EU's Almunia voices concern about FX swings, euro

(Adds Almunia quotes, Bajuk comments, background)

By Swaha Pattanaik

WASHINGTON, April 12 (Reuters) - European Monetary Affairs Commissioner Joaquin Almunia on Saturday voiced concern about sharp swings in exchange rates and the euro's broad-based rise against a range of currencies.

A day after the Group of Seven industrial nations flagged the risks that such exchange rate volatility posed for economic and financial stability, Almunia hammered home the point in a statement to the International Monetary and Financial Committee, the IMF's steering group.

"Recent exchange rate moves are an issue of concern. The increased volatility in foreign exchange markets, which has accompanied the financial turmoil, points to the risk of exchange rate overshooting," he said.

"The euro's real effective exchange rate is approaching a level where it would clearly no longer be in line with economic fundamentals."

Almunia said euro-zone policy-makers had noted "with great attention" the reaffirmation by U.S. authorities that a strong dollar was in the interests of the U.S. economy.

More broadly, he said global imbalances had yet to satisfactorily be addressed, noting that while the U.S. current account gap had narrowed, trade surpluses in China, Japan and emerging Asian economies had continued to rise.

"In order to contribute more strongly to the rebalancing of global current account imbalances, the currencies of the countries with the largest current account surpluses should appreciate more substantially in effective terms," he said.