After posting sharp falls in the waning days of 2004, the dollar these past few weeks has stabilized at around 1.30 to the euro, easing some of the pressure on finance ministers and central bankers from Britain, Canada, France, Germany, Italy, Japan and the United States.

They are to convene here Friday and Saturday and, according to officials from Group members, are expected to adhere to an exchange rate statement they adopted one year ago at a meeting in Boca Raton, Florida.

That declaration found "excess volatility and disorderly movements in exchange rates" to be "undesirable" and called for greater currency flexibility in countries where such an attribute is lacking, a subtle reference to certain Asian economies.

While the abrupt slide in the dollar may be temporarily checked, what are seen in some circles as the causes of dollar weakness -- the huge US budget and current account deficits -- remain as worrisome as ever, especially for Europe.

"We are convinced that the imbalances at the source of the dollar's structural decline -- in other words the swelling US current account deficit -- persist, and that everything must be done to remedy this," French Finance Minister Herve Gaymard said late last month.

"Europe until now has borne too big a share in the adjustment," he said, adding that the G7 meeting here "will be therefore the occasion to discuss this question with all the partners to make precise commitments."

There is fear in the 12-member eurozone that a steadily sliding dollar and appreciating euro will act as a drag on eurozone exports, making them more expensive and less competitive, and eventually hamper economic recovery.

The broader concern is that foreign investors, unnerved by the persistent deficits in the United States, will begin to shun US assets and thereby trigger an even steeper fall in the dollar that would spark a sharp and growth-dampening rise in US interest rates.