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In anticipation of the G20 summit, US dollar falls against major currencies

Wednesday, September 23rd 2009 - 12:47 UTC
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The Euro rose Tuesday to the highest level against the US dollar since August 2008 as investors looked to the Group of 20, G20, summit in Pittsburgh this weekend for more signs about the world economic recovery.

The 16-nation Euro touched 1.4821 US dollars before settling back to 1.4795 in European afternoon trade, up from 1.4677 late Monday in New York. Tuesday's highs in the 1.48s haven't been seen since late August of last year.

The British pound was also higher, at 1.6323 US dollars compared with 1.6194, while the dollar bought 91.39 Japanese yen, down from 92.13 late Monday in New York.

Traders have been ditching the US dollar for other currencies as signals point to an economic recovery and since the Group of 20 finance officials recently pledged to maintain government spending, low interest rates and increased money supply to shore up the global economy.

Those moves should help boost economic activity and liquidity in financial markets, increasing investors' appetite for assets around the world at the expense of the US dollar.

Investors will be looking to the G-20 meeting in Pittsburgh this week for more indications on where the economy is headed and possible recommendations on new rules for financial firms and executives' pay.

“Market participants are keeping one eye on the G-20 Leaders' Summit, which may very well include the topics on bank capitalization and banker compensation,” Wells Fargo said in a research note.

“Overall, this week may be a better one for the dollar than the last couple have been, though it will not necessarily be a decisive one for the dollar's longer-term trend,” Wells Fargo said.

Categories: Economy, Politics, International.

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