EU says go slow on currency

The EU is to tell China to move slowly in exchange rate reform in direct opposition to US demands for a quick revaluation of the yuan, the Financial Times reported. The European Commission has published a report, which is expected to be discussed at a meeting of EU finance ministers in Vienna on Friday, recommending that China "introduce greater exchange rate flexibility in a gradual manner". It warns that a sudden shift in the yuan against the dollar could lead to a fall in capital entering the US which would then see the dollar decline against the Euro. As a result, European goods sold to the US would become relatively more expensive and therefore less attractive to American consumers. According to a spokesperson for Joaquí® Almunia, EU monetary affairs commissioner, the report is in tune with previous comments warning that "volatile exchange rates are not desirable for economic growth."