Dollar mainly weaker as market shakes off G20
Sunday, 27 September 2009
NEW YORK, Sept 26 (AFP): The dollar traded mainly lower yesterday as traders kept a generally upbeat economic outlook and shrugged off comments from the G20 summit stressing the importance of a strong US currency.
The euro was changing hands for 1.4686 dollars at 2100 GMT, compared to 1.4654 dollars in New York late Thursday.
The greenback fell to 89.60 yen from 91.26 yen as the Japanese unit got a boost from comments made at the Group of 20 summit of leading industrialised and developing countries from Japan's new finance minister.
In late New York trade, the dollar stood at 1.0270 Swiss francs from 1.0300 Thursday.
The pound was at 1.5951 dollars after 1.6053.
Boris Schlossberg at Global Forex Trading said traders appeared encouraged that the G20 would affirm their commitment to economic stimulus measures until they see evidence of a sustainable recovery.
The euro tends to benefit from perceived greater economic stability since it is seen by traders as a riskier currency and has a higher yield, while the dollar is considered a safe haven asset in tough economic times.
The market seemed to ignore the comments from some G20 leaders suggesting that a strong dollar is needed in the face of economic imbalances.
The G20 leaders appeared to make "an implicit statement saying they will not engage in a competitive devaluation," said Sacha Tihanyi at Scotia Capital.
He said that in light of comments ahead of the G20 communique, "the focus was off currencies. If there were any comments on currency that would have been a surprise."
During a meeting with Japanese Finance Minister Hirohisa Fujii, US Treasury Secretary Timothy Geithner repeated his view that "a strong dollar is very important to the United States."
Fujii, who took office last week after his center-left party's election win, told Geithner that Japan would stay away from an "intentional" currency policy that would lead to a weaker yen.
The pound also sank to its lowest level against the euro since April after Bank of England Governor Mervyn King said on Thursday that the pound's weakness was "very helpful" to the British economy.
The euro was changing hands for 1.4686 dollars at 2100 GMT, compared to 1.4654 dollars in New York late Thursday.
The greenback fell to 89.60 yen from 91.26 yen as the Japanese unit got a boost from comments made at the Group of 20 summit of leading industrialised and developing countries from Japan's new finance minister.
In late New York trade, the dollar stood at 1.0270 Swiss francs from 1.0300 Thursday.
The pound was at 1.5951 dollars after 1.6053.
Boris Schlossberg at Global Forex Trading said traders appeared encouraged that the G20 would affirm their commitment to economic stimulus measures until they see evidence of a sustainable recovery.
The euro tends to benefit from perceived greater economic stability since it is seen by traders as a riskier currency and has a higher yield, while the dollar is considered a safe haven asset in tough economic times.
The market seemed to ignore the comments from some G20 leaders suggesting that a strong dollar is needed in the face of economic imbalances.
The G20 leaders appeared to make "an implicit statement saying they will not engage in a competitive devaluation," said Sacha Tihanyi at Scotia Capital.
He said that in light of comments ahead of the G20 communique, "the focus was off currencies. If there were any comments on currency that would have been a surprise."
During a meeting with Japanese Finance Minister Hirohisa Fujii, US Treasury Secretary Timothy Geithner repeated his view that "a strong dollar is very important to the United States."
Fujii, who took office last week after his center-left party's election win, told Geithner that Japan would stay away from an "intentional" currency policy that would lead to a weaker yen.
The pound also sank to its lowest level against the euro since April after Bank of England Governor Mervyn King said on Thursday that the pound's weakness was "very helpful" to the British economy.