G20 meeting ended without concret results and overall plan to stimulate economy
The Dollar and the Yen rose against the Euro on Friday as investors were looking for safe-haven amid a deteriorating global economic outlook and losses on Wall Street. This partly reversed losses in the previous session triggered by a more than 6% jump in US stocks. The Dollar remained supported despite data showing sales at US retailers suffered a record decline in October. A separate report showed US consumer confidence rose unexpectedly in November but remained at depressed levels.
Currency traders have closely watched equity performance for direction in recent weeks, with rising share prices boosting risk appetite and hurting demand for the Dollar and the Yen.
Federal Reserve Chairman Ben Bernanke said on Friday financial markets are under severe stress and central bankers around the world are ready to do more to ease credit strains and support faltering economic growth. Fears of a severe global economic slump were heightened after new data confirmed recession in Europe. Chinese growth is also showing signs of slowing, prompting Beijing to unveil a massive multibillion-dollar stimulus package.
On Friday, EurUsd was 0.76% lower at 1.2690, well off the 2-week low of 1.2389 touched on Thursday. EurJpy fell 1.27% to 123.22. UsdJpy fell 0.53% to 97.09. UsdChf rose 0.51% at 1.1919. GbpUsd was 0.68% lower at 1.4802. GbpJpy dropped 1.2% at 143.72. The Yen gained last week 1.26% against the Dollar and 1.82% versus the Euro as ongoing worries about the global economy and credit markets prompted investors to unwind positions funded by cheap borrowing in the Japanese currency.
The Group of 20 major economies ended with lots of pledges of action but few actual proposals to combat a looming global recession. Analyst said "The Yen and Dollar are again finding support from weaker risk appetite due to the lack of concrete results from the weekend meeting". Investors had been hoping for an overall plan that would stimulate the global economy in the short-term.
