By William L. Watts and Michael Kitchen, MarketWatch
FRANKFURT (MarketWatch) — The dollar erased early losses against most rival currencies Friday after an unexpected statement of support for Europe by officials from the Group of 20 major economies failed to provide a lasting lift to equities and other assets perceived as risky.
The dollar index DXY -0.24% , which measures the U.S. unit against a basket of six other currencies, stood at 78.465, down slightly from 78.539 late Thursday.
The euro EURUSD +0.12% gave up earlier gains to slip to $1.3437, down slightly from $1.3446 in late North American trading Thursday.
A small, initial bounce by European equities and U.S. stock-index futures in the wake of the G-20 statement soon gave way to renewed selling, providing renewed safe-haven support for the dollar. The U.S. unit soared Thursday amid a global asset rout.
“After yesterday’s rout, it looked like investors were staying on the sidelines and booking some profit before the weekend. However, the ‘recovery’ was anemic and seemed to be fueled by the G-20 finance ministers’ pledging to stabilize the economy in these turbulent times,” said Kathleen Brooks, research director at Forex.com.
“Talk is cheap, so it seemed only a matter of time before markets sold off once more,” she added.
Late Thursday in Washington, G-20 finance ministers and central-bank governors said they would work in a coordinated fashion to put an end to the latest financial crisis engulfing Europe. See report on G-20 communiqué.
However, analysts at RBC Capital Markets summed it all up well in a note: “All in all, there appeared to be nothing [in the G-20 statement] in the way of concrete new action and markets were generally underwhelmed.”
Against the Japanese yen, the dollar USDJPY -0.09% slipped to ¥76.13 from ¥76.23 late Thursday.
The British pound GBPUSD +0.70% rose to $1.5398 from $1.5339, while the Australian dollar AUDUSD +0.33% traded at 97.01 U.S. cents vs. 96.99 cents late Thursday.
William L. Watts is a reporter for MarketWatch in Frankfurt.
Michael Kitchen is Asia editor for MarketWatch and is based in Los Angeles.
