Euro FX After G7

It would have been more bearish for euro had the statement actually specified (however vaguely) that certain regions were "out of line" or "disproportionate" in terms of their recent moves, yet the reference to "excess volatility" seems more a thin-blanket warning on future (read:expected) "volatility" (aka dollar weakness) rather than a condemnation of current rates of exchange. So if the euro gaps down hard, I'd be willing to bet that the euroministers post-meeting stance of "we got exactly what we wanted" is a bluff the market will eventually call. Who knows, most definitely not me *shrug* :)
 
This originated with the Stephan Evans of the BBC. I came across it here.

The finance ministers from seven of the leading industrial nations have reached an accord at their summit meeting at Boca Raton in Florida.

It is understood that the US accepts that the dollar should not get much weaker against the yen and the euro.

The Americans also want the Chinese currency to be able to move more freely according to the market's dictates.

The call was made in a statement at the end of the two-day meeting in a luxury resort on Florida's Atlantic coast.

The final statement was broad: the global economic recovery has strengthened significantly, it says.

The dollar looks set to stay weak

There should be renewed attempts to bring freer trade.

Excess volatility and disorderly movements in exchange rates are undesirable.

The sub-text of this last assertion is that there is behind-the-scenes agreement that the dollar has fallen enough against the pound, the yen and the euro but that the Chinese currency should be allowed to move more freely.

The Chinese Government currently intervenes so it shadows the dollar.

Oddly perhaps, the Chinese are not part of G7.

Whatever accord is reached though, there is one big political reality - this is election year in America and a weak dollar suits Mr Bush because it promotes American exports and so growth in an economy which will be a hot issue at the polls in November.

This means that there is unlikely to be any stark change of policy until after the election.

The dollar is weak then, it probably will not fall much further but nor will it rise. Or so finance ministers intend.
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There is a possibility this non-event will be hijacked by political opponents and twisted beyond recognition, and this seems like a pretty good distillation of the blather.

maybe the fishing was good...
 
Trade of the year. Sell EurYen. Yen is going to be sub-104 vs. $ soon. Eur will probably hold relatively steady. Any pop in $/Yen, sold to you!
 
No idea, but by the time you can trade it you will already know the answer.

I am biased, but personally I think it is a fairly nondescript statement and reckon the market will test the G7 resolve in the not too distant future.
 
I am reading this weekend .... this is like asking people who will win the Kentucky Derby !

bank of ny - The G-7 may not permit a one-way sell-off in the dollar

Deutsche Bank - The dollar may strengthen to as much as $1.20 in the next few weeks

Citigroup - the euro may trade between $1.23 and $1.27 in coming days.

UBS - The market will be careful about taking the dollar through $1.30

Commonwealth Bank of Australia -

The dollar will bounce in the first half of the week as it seems the G-7 are a little bit uncomfortable with the pace of the decline,

BNP Paribas -

There may be a slight dip in euro-dollar, but it will be short-lived
 
Quote from trade-ya1:

Trade of the year. Sell EurYen. Yen is going to be sub-104 vs. $ soon. Eur will probably hold relatively steady. Any pop in $/Yen, sold to you!
More...

trade-ya1,

So, you are short both euryen and $/yen?
 
Quote from trade-ya1:

Trade of the year. Sell EurYen. Yen is going to be sub-104 vs. $ soon. Eur will probably hold relatively steady. Any pop in $/Yen, sold to you!
More...

:D Trade of today (Monday):

Sell USD/JPY
Buy AUD/CAD

:cool:
 
Against Europe's common currency, the dollar traded at about $1.2581 at 8:10 a.m. in Wellington, from $1.2706 in New York late on Friday
 
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