G20 leaves door open for fresh pressure on dollar
Reuters - The G20 did publish a detailed, unprecedented timetable for countries to discuss the economic rebalancing that could eventually bring more stability to global currency markets.
In an appendix to the communique, G20 countries were asked to submit descriptions of their monetary, fiscal and other policies and plans to the IMF by the end of January 2010. The IMF would produce an analysis of the global economy by April.
G20 countries would then "develop a basket of policy options" in June, and G20 leaders would consider recommendations for policies at a summit in November 2010.
But this plan is clearly constrained by diplomatic sensitivities. For example, the appendix said that, in the first half of next year, the IMF would not recommend policies for specific countries but merely for "groups of countries facing similar circumstances" -- apparently ruling out an explicit recommendation to appreciate the yuan.
So in the short term, currency market trends look as if they will be left to continue, said Simon Derrick, senior currency strategist at Bank of New York Mellon in London.
"It is hard to imagine a level playing field for currencies without resolving the issue of the yuan," he said.
(Editing by Kevin Liffey)