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U.S. Wins Support for Dollar Flexibility By MARTIN CRUTSINGER BOCA RATON, Fla. (AP) -- The United States and its allies softened differences over whether to let the dollar fall freely under market pressures or prop it up with government intervention. A joint statement allowed all sides to claim at least partial victory. The Bush administration won support Saturday for retention of language supporting "more flexibility" in exchange markets, a phrase first used by the Group of Seven wealthy countries last September. The G-7 endorsement of flexibility has been interpreted by currency traders as giving them a green light to push the exchange value of the dollar lower without fear that the United States or other members of the G-7 would try to fight the moves with massive government intervention to brake the dollar's decline. The administration is counting on a declining value of the dollar to boost U.S. exports by making them cheaper on foreign markets. Stronger export sales are expected to lift the fortunes of America's battered manufacturing companies, who have been forced to lay off 2.8 million workers over the past 3 1/2 years. But to meet complaints of European countries that the dollar's decline has been too rapid and too severe and is threatening their companies' export sales, the G-7 inserted a new phrase expressing concerns about "excess volatility and disorderly movements in exchange rates."
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