April 14 (Bloomberg) -- French Finance Minister Christine Lagarde said investors haven't grasped the magnitude of the Group of Seven's shift in stance on exchange rates, likening its significance to the 1985 Plaza Accord.

``It's a strong statement which I am not sure the markets have yet fully understood and appreciated,'' Lagarde said in an interview on Bloomberg Television in New York.

Lagarde's remarks indicate she may be frustrated that the dollar failed to rally today after the G-7 warned that recent ``sharp fluctuations'' in exchange rates risk hurting the global economy. The group of seven major industrial nations issued their statement after the dollar slid 8 percent against the euro and 6 percent versus the yen since they last met in February.

The April 11 statement was ``not very different'' from the importance of the 1985 Plaza Accord, she said. The Group of Five at the time agreed to ``coordinated intervention'' to drive down the dollar. The G-5 then included the U.S., U.K., France, Germany and Japan. It later expanded to add Canada and Italy.

Against the euro, the dollar trading at $1.5847 at 5:27 p.m. in New York, little changed from the April 11 close of $1.5832. It was unchanged at 101.10 yen. The U.S. currency has fallen economic growth faltered and the Federal Reserve lowered interest rates 3 percentage points since September.

Change `Needed'

``It is true the wording of the statement was altered,'' Marc Chandler, global head of currency strategy at Brown Brothers Harriman & Co. in New York, wrote in a note to clients. ``However, given the dramatic change in the financial and economic climate, some kind of change was needed.''

Chandler noted that the G-7's statement didn't single out the dollar, or explicitly call for a ``reversal.'' Lagarde is now taking ``her case to the press and hopes that jawboning will do what the G-7 failed to do,'' he wrote.

The shift in the G-7's language on currencies last week was the first significant change since February 2004 in Boca Raton, Florida, when the group denounced ``excess volatility and disorderly movements in exchange rates.''

``Plaza, Boca Raton and the Washington communique of a couple of days ago -- it's a variance in language and in communiqué of the same magnitude,'' Lagarde said.

The dollar's slump has hurt European exporters, with companies such as Fiat SpA and European Aeronautic Defence & Space Co. complaining about weaker foreign sales.

To contact the reporters on this story: Christopher Swann in Washington at Cswann1@bloomberg.net

Last Updated: April 14, 2008 17:49 EDT