LONDON, June 2: The dollar drove back the euro on Monday after US President George W. Bush reaffirmed the US commitment to a strong dollar, with all eyes in the market on a meeting of G8 world leaders in France.

The single European currency fell to 1.1684 dollars from 1.1781 late on Friday in New York.

The dollar slipped to 118.53 yen from 119.62 on Friday.

The spotlight was on the meeting of the heads of state and government of the Group of Eight (G8) industrialized nations in the French alpine town of Evian.

But Bush gave the US unit a fillip with remarks made ahead the gathering asserting that the recent weakening of the US currency runs counter to the US administration’s strong dollar policy.

The dollar has fallen sharply over the past few weeks since US Treasury Secretary John Snow appeared to redefine Washington’s strong dollar policy to include other factors than its market level.

But a source close to the G8 meeting said leaders at the talks would make no mention of exchange rates in their final summit communique here.

The text, drafted by France as host of the summit, will be released on the final day of the gathering on Tuesday.

Financial markets around the world have been waiting to see if the leaders of Britain, Canada, France, Germany, Italy, Japan, Russia and the United States will say anything substantive about the dollar’s slide against the euro and yen.

The US currency’s decline has caused concern in the euro zone and Japan, where the corresponding appreciation of the euro and the yen is seen as a threat to exports and to the overall momentum of economic growth.

Monday’s rebound in the value of the dollar against the euro was also fuelled by news of a surprise drop in the euro-zone manufacturing sector purchasing managers’ index (PMI) for May.

The index fell to a seasonally adjusted 46.8 in May from 47.8 in April, dealers said. The decline was unexpected. A reading below 50 indicates that the manufacturing sector is generally contracting.

The euro was changing hands at 1.1684 dollars from 1.1781 late on Friday in New York, 138.49 yen (140.51), 0.7174 pounds (0.7198) and 1.5284 Swiss francs (1.5281).

The dollar was being quoted at 118.53 yen (119.62) and 1.3081 Swiss francs (1.3033).

The pound was at 1.6286 dollars (1.6542), 193.07 yen (196.66) and 2.1311 Swiss francs (2.1362).

On the London Bullion Market, the price of an ounce of gold stood at $361.75 from 361.40 on Friday afternoon. —AFP