US Dollar, Japanese Yen Rise As Markets Consider G-20 Outcome

Daily Forex Fundamentals | Written by DailyFX | Nov 17 08 02:47 GMT |

A bland communiqué following the weekend's G-20 saw the financial markets sending mixed signals at the start of the trading week. The leaders of the world's top 20 economies fell short of offering a set of specific policy responses to dealing with the increasingly likely prospect of global recession and the still-shaky financial markets. Although there were calls for a “broader policy response” including both fiscal and monetary measures, the statement disappointed those looking for globally coordinated action, saying that nations should act “as deemed appropriate to domestic conditions”. The bulk of the document focused on broader issues of international financial governance: leaders pledged not to raise trade barriers, promised more funds for the IMF, and set a March deadline for a specific set of recommendations on bolstering accounting standards and regulatory oversight of hedge funds and debt-rating agencies. While the meeting stopped shy of proposing a super-national financial oversight body by reaffirming that primary regulatory responsibilities were a national matter, leaders pushed for “intensified international cooperation” to oversee firms whose activities spread across various jurisdictions. They also called for the creation of “supervisory colleges” of the world's top bank regulators to share information and coordinate their efforts. The group was more ambitious with accounting standards, saying these should be harmonized around the world. The markets seemed uneasy with the summit's outcome. Stocks opened lower in Asian trading, with Australia's ASX down over 3% and the Nikkei down over 2.5%. US stock index futures are also trading lower by about 1%. The Japanese Yen showed strength as USDJPY gapped down 59 pips to open the week at 96.55 having closed at 97.14 on Friday. The Dollar Index, an average of the greenback's value against six top currencies, gapped up to open 1.5% higher from last week's close. DailyFX Disclaimer Investment in the currency exchange is highly speculative and should only be done with risk capital. Prices rise and fall and past performance is no assurance of future performance. This website is an information site only. Accordingly we make no warranties or guarantees in respect of the content. The publications herein do not take into account the investment objectives, financial situation or particular needs of any particular person. Investors should obtain individual financial advice based on their own particular circumstances before making an investment decision on the basis of the recommendations in this website. While we try to ensure that all of the information provided on this website is kept up-to-date and accurate we accept no responsibility for any use made of the information provided. All intellectual property rights are the property of Daily FX. Daily FX and its affiliates, will not be held responsible for the reliability or accuracy of the information available on this site. The content herein is provided in good faith and believed to be accurate, however, there are no explicit or implicit warranties of accuracy or timeliness made by Daily FX or its affiliates. The reader agrees not to hold Daily FX or any of its affiliates liable for decisions that are based on information from this website. Daily FX highly recommends that before making a decision, the reader collects several opinions related to the decision and verifies facts from at least several independent sources.