European Central Bank head Jean-Claude Trichet said on Monday that financial markets were experiencing an "ongoing correction" and repeated that the G7 was concerned about excessive dollar volatility.
"We are observing an ongoing market correction, which has...high level of volatility," Trichet told a news conference during a meeting of the Group of 30 in Israel.
Trichet reiterated a statement by the Group of Seven industrialised nations that sharp moves in the dollar versus the euro were a "cause of concern."
"We indicated together that sharp moves and excessive volatility was a cause of concern. There is nothing new there," he said.
The head of the New York U.S. Federal Reserve Bank Timothy Geithner told the news conference that the United States was going through a "necessary but difficult adjustment process" and that the world was "coming out of a long boom."
"But the circumstances in each country are very different and the policy responses are going to have to be very different even though we face a common challenge in the global inflation dynamics," Geithner said.
"We face very different circumstances. What we each have to do is try to find that balance that's going to lay the foundation for price stability and sustainable growth over a long period of time," he added.
Geithner said that compared with the oil shock of the 1970s, the global economy was "better positioned to deal with the consequences of the slowdown." "It's looking at least for now really very resilient to the broader pressures you see," Geithner said.
Trichet declined to comment on how the ECB planned to tackle rising inflation. Geithner said the Fed would combat inflation risks "effectively" but declined to elaborate.