Paulson says strong dollar in U.S. interest

WASHINGTON (Reuters) - Treasury Secretary Henry Paulson repeated long-standing dollar language on Thursday, saying a strong dollar is in the U.S. interest and expressing confidence that strong long-term U.S. economic fundamentals will be reflected in the value of the currency.

"I've been as consistent as anyone that you've ever heard in saying that the (strong) dollar in our nation's interest," he said in an interview with Reuters.

Paulson said the U.S. economy is in a difficult period but its underlying strength would eventually be reflected in the value of the dollar, , which has lost roughly 40 percent of its value against a broad basket of currencies since 2002.

"We're going through a tough patch right now," Paulson said. "I do believe our fundamentals, long-term fundamentals, are solid, and they'll be reflected in the value of our currency."

Pressed on whether the dollar could drop too far, Paulson declined to comment. "I'm not going to speculate about markets," he said.

Paulson said language in the Group of Seven rich nations' communique on April 11 expressing concern about sharp currency fluctuations, a reference to the dollar, spoke for itself.

"I'm not going to comment beyond that," Paulson said. "If we never changed it, what's the point of even having a communique. Market conditions are generally changed."

(Reporting by Mark Felsenthal; Editing by Neil Stempleman)