US Treasury spokesman Robert Nichols said Treasury Secretary John Snow is "going to continue to push for flexible market based exchange rates," at the Dubai meeting and would seek a reference to flexibility in the final communique.

Snow believes "it would be useful if the (final) communique expressed support for flexible exchange rates", he said.

But the official added that Snow "does not intend to single out any country while he is here".

The US administration is concerned that the currencies of Asian countries -- and in particular China's yuan -- are substantially undervalued and eating away at US exports.

Europe is also worried that the euro could undergo an uncomfortably sharp surge if the massive US current account deficit causes the dollar to fall and Asian currencies are not allowed to appreciate.

Nichols cited Snow as telling reporters on his plane headed for Dubai that "the world's trading system works best under a regime of market based exchange rates."

Britain's Chancellor of the Exchequer Gordon Brown appeared to offer support for the US position, saying that the final statement would make clear that exchange rates should reflect economic fundamentals.

"I think you'll see a general agreement that, as we've always said, that exchange rates should reflect economic fundamentals," Brown said, when asked if he shared the US view that the G7 communique ought to endorse flexible, market-based exchange rates.

No specific countries would be named with regard to exchange rates, Brown added in a press briefing.