Back
18 Feb 2013
G20 statement settles on generalities; approval to keep selling the Yen?
The G20 weekend meeting and its final statement settled again on generalities, with key passages posing little risk to neither discredit nor criticize ongoing Japanese polices, where no specific mention was noticed.
As Sean Callow, Westpac FX strategist, notes: "G20 statements always reflect the difficulty in reaching agreement among nations with often quite diverse policy approaches, settling on generalities with little risk of shaking up markets. Once again, for FX markets, the Moscow statement offered only a modest tweak compared to the Nov 2012 Mexico City statement"
Some key FX-related passages obtained from the statement can be found below:
- “We will not target our exchange rates for competitive purposes”.
- "We reaffirm our commitment to cooperate for achieving a lasting reduction in global imbalances..."
- "We reiterate our commitments to move more rapidly toward mores market-determined exchange rate systems and exchange rate flexibility to reflect underlying fundamentals, and avoid persistent exchange rate misalignments..."
- "We reiterate that excess volatility of financial flows and disorderly movements in exchange rates have adverse implications for economic and financial stability.
- "We will refrain from competitive devaluation. We will not target our exchange rates for competitive purposes, will resist all forms of protectionism and keep our markets open."
In brief, as Forexlive editor Eamonn Sheridan, notes: "If policy is aimed at achieving results in the domestic economy then its OK. Of course, it is difficult to gauge whether domestic policies are, or are not, aimed at weakening the currency."
As Sean Callow, Westpac FX strategist, notes: "G20 statements always reflect the difficulty in reaching agreement among nations with often quite diverse policy approaches, settling on generalities with little risk of shaking up markets. Once again, for FX markets, the Moscow statement offered only a modest tweak compared to the Nov 2012 Mexico City statement"
Some key FX-related passages obtained from the statement can be found below:
- “We will not target our exchange rates for competitive purposes”.
- "We reaffirm our commitment to cooperate for achieving a lasting reduction in global imbalances..."
- "We reiterate our commitments to move more rapidly toward mores market-determined exchange rate systems and exchange rate flexibility to reflect underlying fundamentals, and avoid persistent exchange rate misalignments..."
- "We reiterate that excess volatility of financial flows and disorderly movements in exchange rates have adverse implications for economic and financial stability.
- "We will refrain from competitive devaluation. We will not target our exchange rates for competitive purposes, will resist all forms of protectionism and keep our markets open."
In brief, as Forexlive editor Eamonn Sheridan, notes: "If policy is aimed at achieving results in the domestic economy then its OK. Of course, it is difficult to gauge whether domestic policies are, or are not, aimed at weakening the currency."