ALAN GREENSPAN, Chairman of the US Federal Reserve, undercut lingering hopes of staging an operation to support the dollar at a meeting of bankers in Frankfurt yesterday, prompting speculators to drive the dollar down further against other major currencies. The euro rose to $1.3060, a record, while gold also benefited from the dollar’s slide.

Mr Greenspan said that intensive studies suggested that the effect of official intervention on the foreign exchanges tended to be modest and temporary. He argued that the proliferation of financial instruments and derivatives, along with the large quantities of speculative money moved by hedge funds and other traders, made it much harder for intervention to affect the markets.

Yesterday’s remarks came ahead of this weekend’s meeting of finance ministers and central bankers of the Group of 20 industrial and emerging countries in Berlin. Some eurozone governments had hoped that a programme of co-ordinated currency intervention might be agreed on the sidelines of the meeting.

John Snow, the US Treasury Secretary, whose rallying speeches round Europe this week have done nothing to aid his currency, yesterday put another damper on hopes for official action. He said: “The G20 is not a forum for discussion of exchange rates, so that is not an issue that is on the agenda.” The focus at the meeting would instead be on removing barriers to global growth, particularly in the stagnant German economy, he said.

Mr Greenspan gave further succour to dollar bears when he admitted that it could become harder to persuade foreign investors to make up for North America’s $50 billion (£27 billion) a month trade deficit by putting more of their money into dollars. His statement meant that the Federal Reserve was accepting the likelihood that the dollar would fall further, some traders said.

Mr Greenspan said: “It seems persuasive that, given the size of the US current account deficit, a diminished appetite for adding to dollar balances must occur at some point.” He said that international investors might stop acquiring more dollar assets or higher returns, “elevating the cost of financing the US current account and rendering it increasingly less tenable”.

The Fed Chairman emphasised that the best solution to the trade gap and the falling dollar was to speed up cuts to the US budget deficit. G20 ministers are this weekend likely to press the US to act fast.

Gordon Brown is also likely to steer away from discussion of currencies. The Chancellor is planning to use the G20 meeting to promote another pet project. He wants the meeting to back his call for better planning to cope for an ageing population.

He has called on the IMF to conduct regular surveys of the long-term impact of demographic change on the economies and finances of the G20.

ABSENT WITHOUT LEAVE

Attempts to promote the G20 as a counterweight to the summer G7 summit have been undermined by a rash of absences from this weekend’s meeting. Russia’s Finance Minister is ill. France’s Nicholas Sarkozy is too busy with election planning. Ministers from Japan and Korea are absent for their domestic budgets. Argentina is not attending at all because it hopes to get out of signing up to a model debt restructuring code that is meant to be one of the G20’ s main achievements.