Finance chiefs from the Group of Seven nations signaled concern on the dollar's slide and said the global economic slowdown may worsen amid an ``entrenched'' credit squeeze.

``Since our last meeting, there have been at times sharp fluctuations in major currencies, and we are concerned about their possible implications for economic and financial stability,'' the G-7's finance ministers and central bankers said in a statement after talks in Washington yesterday.

The officials downgraded their outlook for the world economy from that of two months ago, blaming the U.S. housing recession, credit-market turmoil, commodity prices and inflation pressures. The dollar has lost 8 percent against the euro and 6 percent versus the yen since the G-7 last met in Tokyo in February.

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``They ratcheted up the currency rhetoric a notch or so,'' said Marc Chandler, global head of currency strategy at Brown Brothers Harriman & Co. in New York. ``They're trying to buy some time for the dollar.''

The new language was the first significant change in the G- 7's view of currencies since a February 2004 meeting in Boca Raton, Florida. The U.S. currency reached a record low of $1.5913 against the euro this week.

Monitoring Markets

``We continue to monitor exchange markets closely, and cooperate as appropriate,'' the G-7 said.

Treasury Secretary Henry Paulson said the change in the G-7 statement on currencies ``reflects market developments and changes in the markets.'' He also said he told the G-7 ``in very strong terms our commitment to a strong dollar.''

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