Euro holds firm after G20 summit
Tuesday, 29 June 2010
TOKYO, June 28 (AFP): The euro held steady against other major currencies in Asia Monday after weekend talks between Group of 20 leaders in Toronto delivered no upset to markets, economists said.
The euro was at 1.2380 dollars in Tokyo afternoon trade, flat from New York late Friday, while edging up to 110.69 yen from 110.57 yen.
The dollar was trading at 89.40 yen, up from 89.20 yen in New York.
The leaders' joint statement, released at the end of two days of talks, warned that "failure to implement consolidation where necessary would undermine confidence and hamper growth", but signalled compromise on such moves.
"Advanced economies have committed to fiscal plans that will at least halve deficits by 2013 and stabilise or reduce government debt-to-GDP ratios by 2016," it promised.
The communique, thick with exemptions and caveats, was signed by leaders who "intended their statement not to affect anybody", said Mizuho Corporate Bank market economist Daisuke Karakama.
"They achieved the goal of being neutral to markets-it's a statement of little meaning," he said. "There is nothing concrete in the statement," he added, noting that it was unclear how compulsory the debt-cutting goals are.
A dealer at a major North American bank in Japan told Dow Jones Newswires the G20 outcome showed restraint in debt-cutting goals, easing some concern that austerity measures could drag on risk-sensitive assets such as the euro.
"Given all the worry about the financial trouble in Europe and elsewhere, the G20 outcome doesn't set very strict guidelines for trimming debt," the dealer said, forecasting a firmer single currency in the near term.
The G20 statement also called for "greater exchange rate flexibility in some emerging markets" but shied away from specifically naming China, which has been pressured to allow the yuan to strengthen to ease trade imbalances.
The euro was at 1.2380 dollars in Tokyo afternoon trade, flat from New York late Friday, while edging up to 110.69 yen from 110.57 yen.
The dollar was trading at 89.40 yen, up from 89.20 yen in New York.
The leaders' joint statement, released at the end of two days of talks, warned that "failure to implement consolidation where necessary would undermine confidence and hamper growth", but signalled compromise on such moves.
"Advanced economies have committed to fiscal plans that will at least halve deficits by 2013 and stabilise or reduce government debt-to-GDP ratios by 2016," it promised.
The communique, thick with exemptions and caveats, was signed by leaders who "intended their statement not to affect anybody", said Mizuho Corporate Bank market economist Daisuke Karakama.
"They achieved the goal of being neutral to markets-it's a statement of little meaning," he said. "There is nothing concrete in the statement," he added, noting that it was unclear how compulsory the debt-cutting goals are.
A dealer at a major North American bank in Japan told Dow Jones Newswires the G20 outcome showed restraint in debt-cutting goals, easing some concern that austerity measures could drag on risk-sensitive assets such as the euro.
"Given all the worry about the financial trouble in Europe and elsewhere, the G20 outcome doesn't set very strict guidelines for trimming debt," the dealer said, forecasting a firmer single currency in the near term.
The G20 statement also called for "greater exchange rate flexibility in some emerging markets" but shied away from specifically naming China, which has been pressured to allow the yuan to strengthen to ease trade imbalances.