Financial Post Articles
The US$ rose against major currencies yesterday after officials from the Group of Seven leading industrial nations signalled they're not yet prepared to act together to cap the currency's two-year rally.
G7 finance ministers and central bankers, meeting in Washington Sunday, cautioned in a statement against ``excess volatility'' in currency rates and said they'd ``co-operate as appropriate in exchange markets.''
Yet they didn't call for a weaker US$ or indicate that they're about to jointly sell the U.S. currency. Traders took that as cause to buy US$s.
``There was nothing too negative, too detrimental in what they said to keep you from accumulating US$s,'' said Don Quattrucci, a currency trader at Mellon Bank in Boston. Their statement ``was a roundabout way of saying: `We're watchful and might do something,' but I don't think there's a central banker out there who has a problem with the US$'s level now.''
Just after the statement's release, the US$ rose as high as 1.7392 German marks, its highest since Feb. 14, 1994. It closed at 1.7325 marks, up from 1.7275 marks Friday. The US$ rose to 126.85 yen from 125.46 yen.
The US$ pared some gains after German and Japanese officials cautioned against interpreting the G7 statement as a green light to drive the US$ higher.
But Bank of England governor Eddie George confirmed the view that central bankers won't soon sell US$s when he said after the meeting that there had been ``no pressure'' at the talks for an immediate intervention.
``It's not what they say, but what they don't say,'' said Karl Halligan, chief currency trader at CIC Bank New York. ``There was no agreement to co-ordinate in stopping the US$.''
In other trading, the British pound rose to US$1.6247 from US$1.6216. The US$ rose to 1.4735 Swiss francs from 1.4687 francs and to 5.8400 French francs from 5.8305 francs.
The C$ closed lower after a quiet session that saw many investors unwilling to move ahead of impending U.S. data. The US$ rose to $1.4003 from $1.3974. The C$ fell to US$71.41 from US71.56 cents.
||This Information System is provided by the University of Toronto Library and the G8 Research Group at the University of Toronto.|
Please send comments to:
This page was last updated .