Dollar Stable As G20 Urges Market-Determined Currency Trade
The dollar was steady on Friday, holding on to this week's gains as the G20 outlined an agreement to unleash domestic demand in surplus countries.
With the White House saying this will support strong global growth and support a robust recovery in the US, the dollar continued to reverse its steep early losses from the past few months.
G20 members said they should refrain from competitive devaluation of currencies, but resisted US efforts to specifically push China on its currency, which the White House says is artificially weak. This gives Chinese exporters a big advantage over US manufacturers.
Commodity prices slumped and US stocks were poised for a sharply lower open this morning, as risk aversion bolstered the safe haven dollar.
Meanwhile, the debt crisis in Ireland continued to spook investors, and became a distraction to European leaders gathered in Seoul for the G20 Summit.
The dollar was stuck near $1.3700 against the euro as traders assessed headlines coming out of the G20 Summit in Seoul. Earlier this month, the dollar touched a 10-month low near $1.43.
Eurozone economic growth moderated more than forecast in the third quarter reflecting slowdown in all its major economies as many of them are undergoing fiscal squeeze.
The economy expanded 0.4% quarter-on-quarter in the third quarter, flash estimates from European Union statistical office Eurostat showed Friday.
The dollar was slightly weaker versus the yen, easing to Y81.90. Yesterday the buck hit a monthly high of Y82.78.
The buck was steady near $1.61 against the sterling, and briefly ticked above C$1.01 against its Canadian counterpart.
Currency and trade compromises came out of Seoul, as world leaders acknowledged the need for export-reliant nations to bolster domestic demand. However, the G20 agreed that measures to control their massive capital inflows should be "carefully designed."