Quote from Pippi436:
Susi: whats the source of this data?
I believe it is from FXCM's trade book.
I smell an attempt at a joint intervention in currency markets.
Geithner Said He Wonât Let Dollar Fall, Mantega Says
Oct. 21 (Bloomberg) -- U.S. Treasury Secretary Timothy Geithner told Brazilâs Finance Minister Guido Mantega yesterday that the U.S. wonât allow the dollar to weaken, Mantega said.
Mantega said he and Geithner agreed to act jointly with the Group of 20 nations to find a solution for the dollarâs depreciation. Geithner also said in a telephone conversation that the impact of Federal Reserve policies is being âoverestimated,â Mantega told reporters in Brasilia today.
âHe said he doesnât intend to allow a devaluation of the dollar,â Mantega said. âHe assured me that the policy is not to weaken the dollar, but on the contrary, to strengthen it.
âI then asked him about the Fedâs policy and he said that this policyâs impact is being overestimated,â Mantega said.
Brazilâs finance minister said he told Geithner that a firm stance by the U.S. against further weakening in the dollar would âcreate conditions to open a negotiationâ with other countries seeking to reduce volatility in their currencies, and may help reduce pressure on China to strengthen the yuan.
âOtherwise itâs hard, to weaken the dollar and to want a revaluation of the yuan,â Mantega said.
G-20 policy makers are convening in South Korea amid concern countries are pursuing weaker exchange rates as a route to stronger economic growth, either by selling their own currencies or by discussing monetary easing, as the U.S. and U.K. have done. The moves risk a protectionist backlash that curbs global growth, with emerging markets including Brazil and South Korea already stiffening capital controls to stem the rise of their currencies.
Dollar Flows
Massive amounts of dollars are flowing into emerging markets in search of higher returns, leading to what Mantega has called a âcurrency war.â Brazil on Oct. 18 raised to 6 percent from 4 percent a tax on some foreign investments and yesterday closed a tax loophole in the countryâs derivatives market in a bid to stem the inflow of dollars.
Geithner said Oct. 18 that âno country can devalue its way to prosperityâ and the U.S. will âwork very hard to make sure that we preserve confidence in a strong dollar.â
