Dollar wanes as finance ministers meet

09:02, October 09, 2010      

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The dollar traded near an eight-month low against the euro Friday, and stock markets slid ahead of key US data and as major powers gathered in Washington to avert a damaging global "currency war."

With recovery painfully slow, recent weeks have seen nations from Japan to Colombia intervene to stop their currencies from rising to levels that would make exports prohibitively expensive, sparking talk of a currency war among key trading nations.

"It is a very real threat, and it will be in focus this weekend at the IMF/World Bank series of meetings in Washington," GFT analyst David Morrison said.

In London trade, the euro eased to $1.3914, one day after it had rocketed to $1.4029 - its highest level since late January.

Against Japan's currency, the dollar stood at 82.34 yen, after tumbling Thursday to a 15-year low at 82.11.

European stock markets also fell, with investors on tenterhooks ahead of the release of crucial figures of the US economy, which unexpectedly shed 95,000 jobs in September.

Early this morning, the world's top economic powers were set to gather in Washington and address fears of potentially damaging currency competition amid bleak hopes for a deal between China, the US and other top nations.

Finance ministers and central bankers from 187 countries are convening for the annual meeting of the International Monetary Fund, while confronted by warnings that beggar-thy-neighbor policies could wreck the global recovery.

"Given the recent environment of rhetoric about 'currency wars,' unilateral intervention in foreign exchange markets and the introduction of policies to limit capital flow, there has been a lot of attention focused on what can be expected from this weekend's meetings," Barclays Capital analyst Raghav Subbarao said.

Source: Global Times


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