WASHINGTON (Reuters) - The Treasury believes foreign exchange markets are behaving largely in line with underlying economic fundamentals ahead of a meeting this week of Group of 20 finance ministers and central bank governors, a senior Treasury official said on Monday.

Treasury Secretary Jack Lew will nonetheless still emphasize the need for the world's biggest economies to avoid competitive currency devaluations at the meeting in Chengdu, China, the official told reporters on a conference call.

(Reporting by David Lawder, editing by G Crosse)