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UPDATE 1-ECB's Trichet, EU's Juncker to discuss FX with China

Wed Jul 9, 2008 3:30pm IST
 
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(adds Juncker quotes)

STRASBOURG, France, July 9 (Reuters) - European Central Bank President Jean-Claude Trichet and Eurogroup chairman Jean-Claude Juncker will tell China in fresh talks later this year that the yuan is undervalued, Juncker said on Wednesday.

"President Trichet and I went to China last November to talk about exchange rate policies together with Chinese authorities and we will be repeating that exercise in the second half of the year," Juncker told the European Parliament.

He later told reporters thatthey would pursue the monetary dialogue they had begun with China, probably on the sidelines of an EU-China summit due to be held in Lyon, France, in November. "We will draw the attention of the Chinese authorities once again to the fact we think the yuan is undervalued and the euro has a too strong position against the yuan," Juncker said.

During last year's trip the two men, plus European Union Economic and Monetary Affairs Commissioner Joaquin Almunia, met Chinese monetary officials to discuss ways of preventing volatile currency swings as well as China's willingness to allow the yuan to strengthen against the euro.

European Commission President Jose Manuel Barroso reiterated Europe's call for China to take more account of the yuan's exchange rate against the euro at a meeting of G8 industrialised economies in Japan on Wednesday.

Trichet told the European Parliament the EU was united with other G7 partners in sending that meesage to the Chinese.

"At this stage, we agree with all the partners of the G7 on the message for China. There is no ambiguity there. We have said that in the last G7 communique very, very clearly," he said. (Reporting by Pete Harrison; Writing by Paul Taylor and Marc Jones; Editing by Victoria Main)

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