Officials at the Group of Seven (G7) said that Washington, which is concerned undervalued Asian currencies are unfairly hurting the domestic economy, wanted the final communique of the meeting to call for exchange rate "flexibility" across the world.

Although Washington has stopped short of mentioning any specific country, the diplomatic wording would be seen as a clear message to Asian countries, in particular China, to allow their currencies to rise by adapting their forex systems.

US manufacturers argue that China's yuan -- which has been pegged to the dollar at around 8.3 for the past nine years -- is undervalued by 15 per cent and is unfairly eating away at US exports.

A US Treasury spokesman said that Treasury Secretary John Snow believed "it would be useful if the (final) communique expressed support for flexible exchange rates".

But the spokesman, Roger Nichols, said that Snow "does not intend to single out any country while he is here".

Another official close to the talks told AFP that it was "not excluded" that the communique would contain a reference to "exchange rate flexibility".

Snow comes to Dubai after visiting China earlier this month, where he failed to persuade Beijing to give ground on the issue, which has become a politically sensitive topic in the United States in the light of its persistently high jobless rates.

However Washington should receive some support for its stance from Europe, which is worried that the euro could undergo a damaging surge when the US current account deficit causes the dollar to fall, if Asian countries do not let their currencies appreciate.

European Central Bank chief Wim Duisenberg has complained that a burden from a fall in the dollar is landing exclusively on the shoulders of the euro.

China, which is not a member of the elite G7 group (Britain, Canada, France, Germany, Italy, Japan and the United States), is by no means the only Asian country coming under pressure for its currency policies.

Several other Asian countries have currency pegs to the dollar and Japan is also in the sights of its partners for intervening in the foreign exchange markets to curb the strength of the yen and boost the competitiveness of its own exports.

The G7 economic leaders will also be looking at ways to help the nascent global economic upturn, with the meeting taking place against a background of cautious optimism that the world economy could be back on track.

Earlier this week, the International Monetary Fund (IMF) gave a relatively upbeat assessment in its World Economic Outlook released here, but warned the upturn was fragile and remained exposed to numerous risks.

The IMF warned the twin US deficits -- budget and current account -- are among the gravest looming problems for the world economy.