THE dollar slipped to a fresh low against the euro yesterday after John Snow, the US Treasury Secretary, poured cold water on any suggestions of co-ordinated central-bank action to prop up the ailing greenback.

Mr Snow, speaking in London, said: “I think the history of efforts to impose non-market valuations on currencies is at best unrewarding and chequered.”

Within minutes of his pronouncement, the US currency weakened as far as $1.3035 to the euro. It also fell to a seven-month low of 103.9 yen. Mr Snow’s comments dashed any faint hopes of the US Federal Reserve joining other countries in a co-ordinated move to stem the dollar’s precipitous slide.

Don Smith of ICAP commented: “The US Administration is going to be unresponsive to any calls for intervention. And it would not be particularly discomforted by a further slide in the dollar.”

Mr Snow repeated his insistence that the US was still pursuing a strong dollar policy. However, he said that the market must decide, and analysts said that the tone of his statement suggested he was happy to go on with a strategy of benign neglect.

The dollar has fallen 30 per cent against the euro over the past two years as traders increasingly fret about the deficits on trade and government finances.

Repeatedly pressed on how he could describe his actions as a strong dollar policy, Mr Snow said: “The policy is the policy.”

European leaders are divided about the threat posed by the weakening dollar, which hits eurozone exporters. But many agree with Jean-Claude Trichet, European Central Bank president, who has called the recent falls “brutal”.

Mr Snow promised to tackle the budget deficit. “We know it’s too high. We know it has to come down. It’s now in the process of coming down.”

The US President’s budget plan would halve it to less than 2 per cent of GDP within four years, he said. Economic growth would boost tax receipts, he said, while there would be tight control of spending.

Mr Snow was optimistic that China would decouple its currency from the dollar, easing the imbalance that the current peg has caused. “They’ve embraced the idea of moving towards flexibility,” he said.

“We’re saying ‘let’s get on with it.’ They are getting on with it.”

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