Dollar Attempts to Reverse Downward Trend Ahead of G-20 Meeting

The US dollar fluctuated today, attempting to rise but meeting a resistance, as Timothy Geithner, the US Secretary of the Treasury, suggested that the G-20 countries should agreed on the targets to reduce the current account imbalances.

Geithner proposed, as a measure to ease the currencies tensions and prevent the so-called currency wars, the countries with the positive trade balance to decrease their surpluses, in the same time helping the countries with the trade deficits. The leaders of other countries divided in their opinions on this proposal. Yoshihiko Noda, Japan’s Minister of Finance, said that “setting numerical targets would be unrealistic”, while Jim Flaherty, Canada’s Minister of Finance, named such measures as a “step in the right direction”.

The traders today weren’t willing to make any big moves, awaiting for the outcome of the G-20 meeting, which started today. The analysts say that, while it’s hard to predict how the meeting may influence the currencies, the dollar remained weak in the longer term.

EUR/USD fell from 1.3920 to 1.3931 today as of 18:49 GMT. GBP/USD dropped from 1.5703 to 1.5667 after it rose to the intraday high of 1.5749. USD/JPY went up from 81.33 to 81.40 after it slid as low as 80.99.

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