Dollar holds gains, G20 surprises no one

The dollar, euro and yen got off to a subdued start on Monday after a weekend meeting of G20 policymakers ended with no new coordinated action to spur global growth, an outcome that was not entirely surprising.

That left the greenback holding onto broad gains made on Friday after a positive set of U.S. data kept alive the risk of a hike in U.S. interest rates this year.

It was just under 114.00 yen JPY=, little changed from where it closed in New York on Friday when it climbed 0.9 percent. The euro was also steady near 124.50 yen EURJPY=R.

The common currency was flat at $1.0925 EUR=, languishing near a one-month trough of $1.0912 set on Friday.

Other major currencies were equally uninspired with the Australian dollar flirting with 71 U.S. cents AUD=D4, nursing a 1.5 percent drop on Friday. Its New Zealand counterpart was near 66 cents NZD=D4 after suffering a 1.4 percent slide.

A communique from the Group of 20 finance ministers and central bankers flagged a series of risks to world growth, including volatile capital flows, a sharp fall in commodity prices and the potential “shock” of a British exit from the EU.

G20 ministers agreed to use “all policy tools – monetary, fiscal and structural – individually and collectively” to reach the group’s economic goals.

“Expectations for any substantive commitments out of G20 were sufficiently low such that we shouldn’t expect any significant market response early this week,” said Ray Attrill, global co-head of FX strategy at National Australia Bank.

That would leave the focus on a batch of economic data due this week starting with manufacturing surveys from China to Europe and the United States on Tuesday.

Australia’s central bank meets on Tuesday and is expected to keep interest rates unchanged. The market will be keen to hear its latest assessment on the global economy.

Source: Reuters

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