Bush says strong dollar in U.S. interest

By Tabassum Zakaria

WASHINGTON (Reuters) - U.S. President George W. Bush acknowledged economic concerns as he left for Europe on Monday, saying the United States was committed to a strong dollar and that energy prices were high.

"I'll talk about our nation's commitment to a strong dollar. A strong dollar is in our nation's interests. It is in the interests of the global economy," Bush said at the White House before departing for a U.S.-European Union summit in Slovenia.

The dollar tumbled on Friday after a jump in the unemployment rate underscored the U.S. economy's weakness and was a factor that contributed to the biggest one-day price gain in the history of the oil market. Oil surged by nearly $11 a barrel to a record above $139.

Europeans are concerned about the dollar's weakness and have urged the Bush administration to speak up more forcefully in defense of the U.S. currency.

Since oil is priced in dollars, Europeans blame some of their inflation pressures on the dollar's weakening value and fear the cheap dollar will make their products more expensive in U.S. consumer markets.

Bush will discuss the economy with European leaders during his June 9-16 trip, which will include stops in Germany, Italy, France and Britain.

"Our economy is large and it's open and flexible," Bush said. "Our capital markets are some of the deepest and most liquid. And the long-term health and strong foundation of our economy will shine through and be reflected in currency values."

He said he recognized the public was concerned about the U.S. economy in the face of rising energy prices.

"A lot of Americans are concerned about our economy," Bush said. "I can understand why. Gasoline prices are high, energy prices are high."

He said he would discuss with European allies the need to advance technologies to become less dependent on hydrocarbons. Bush reiterated his stance that the United States should increase domestic oil production and that Congress should allow drilling in Alaska's Arctic National Wildlife Refuge.

Record-high oil prices have raised concerns about the impact on the U.S. economy, which is barely growing. The U.S. unemployment rate jumped to 5.5 percent in May, its highest in more than 3-1/2 years, contributing to renewed fears that the U.S. economy was at risk of sliding into recession.

"The U.S. economy has continued to grow in the face of unprecedented challenges," Bush said.

"We got to keep our economies flexible. Both the U.S. economy and European economies need to be flexible in order to deal with today's challenges," he said.

Bush said he also would discuss with European allies the need to do more to help Afghanistan. His wife, Laura, visited Afghanistan during the weekend and reported that she saw progress but also "there's a lot of work to be done," Bush said.

(Editing by Bill Trott)