US Federal Reserve rejected criticism that its actions (‘accommodative monetary policy’) have pushed down the foreign exchange value of the US dollar and thereby boosted the price of commodities, adding that the Fed is “fully committed” to maintaining the dollar’s purchasing power and to keeping inflation in check.
The US dollar continues to slide in the Uruguayan foreign exchange market having lost 1.85% in May vis-à-vis the Uruguayan peso, completing the steepest monthly drop so far in 2011.
China's Yuan has hit a record high against the US dollar after the US Treasury department said the Chinese currency was undervalued but not manipulated. The People's Bank of China (PBOC) fixed the Yuan's mid-point at 6.4856 against the US dollar on Monday.
Testifying before Congress Brazilian Finance Minister Guido Mantega said that international commodity prices are behind much of the country’s rising inflation, but insisted the government will take action to keep prices in check and prevent the currency from strengthening too far too fast.
United States crude oil futures rose Thursday to hit a 31-month high settlement after a volatile trading session while the US dollar fell to a three-year low against major currencies following on the Federal Reserve's intention to keep interest rates near zero.
Gold advanced to a record, set for the best run since November 2006 after rising for nine days, as investors sought to protect their wealth against a weaker dollar, faster inflation and geopolitical tension in the Middle East. Silver climbed to a 31-year high.
Brazil believes the impact of an undervalued US dollar which is appreciating other currencies such as the Brazilian Real, ‘won’t last long’ according to forecasts from Finance Minister Guido Mantega.
The IMF criticized developing countries for not responding strongly enough to the surge of hot money into their markets, saying the result could be a hard economic landing.
The G20 have reached a deal on indicators to detect economic imbalances, the French presidency said, after the meeting ended in Paris. The world's leading economies agreed on a compromise after frank, sometimes tense negotiations, French Finance Minister Christine Lagarde said.
The International Monetary Fund will warn G20 finance ministers this weekend of growing risks to the world economy from surging food prices and public finances while also advocating a somewhat weaker dollar.