MW: Dollar rises vs. most rivals as G-20 ministers meet
By Lisa Twaronite, MarketWatch
TOKYO (MarketWatch) — The dollar gained against most major rivals in Asian trading Friday, as investors were reluctant to be short of the U.S. unit as finance ministers from the Group of 20 nations gathered in the South Korean city of Gyeongju.
In a letter to his G-20 counterparts, U.S. Treasury Secretary Timothy Geithner said countries shouldn’t use competitive exchange-rate policies and that exchange rates should reflect economies.
G-20 members should “commit to refrain from exchange-rate policies designed to achieve competitive advantage by either weakening their currency or preventing appreciation of an undervalued currency,” Geithner said. He also recommended that G-20 members aim to keep current-account balances within a set level of gross domestic product. Read more on what U.S. will seek at G-20 meeting.
The dollar index (DXY 77.47, +0.06, +0.07%) , a measure of the U.S. unit against a basket of major global currencies, recovered to 77.521 from 77.427 in late North American trading Thursday.
Against the Japanese yen, the dollar (USDYEN 81.1300, -0.1800, -0.2214%) weakened to ¥81.14 from ¥81.30 late Thursdays, with investors apparently more willing to test the Japanese unit’s upside due to perceptions that Japanese financial authorities won’t opt for yen-weakening intervention while the G-20 summit is taking place.
Japanese Finance Minister Yoshihiko Noda told reporters Friday that Japan would reconfirm at the G-20 that exchange rates should reflect countries’ economies, leaving out his usual vow to take appropriate action as necessary.
Noda called the U.S. proposal of targeting reductions in current-account imbalances “unrealistic.”
The euro (EURUSD 1.3917, -0.0005, -0.0359%) slipped to $1.3898 from $1.3933 late Thursday, and the British pound (GBPUSD 1.5692, -0.0017, -0.1082%) fell to $1.5663 from $1.5712.
