Dollar keeps climbing as G7 meet on world economy
11 May AFP
The US dollar pushed higher Friday and the yen sagged as the finance
chiefs of the G7 began meeting outside London on global economic
challenges and Japan stuck to its guns on monetary easing.
The euro dropped back below the $1.30 line while the dollar almost
touched 102 yen, underscoring the better economic shape the US finds
itself in than its G7 brethren.
At 2200 GMT the euro was at $1.2993, down from $1.3044 late Thursday.
The dollar traded at 101.62 yen, compared to 100.55 yen a day
earlier.
The euro also gained on the Japanese currency, rising to 132.03 yen
from 131.17.The Group of Seven top economies opened fresh talks on
spurring growth Friday amid US-Europe divisions over the scale of
austerity and renewed market focus on “currency wars” after the yen hit
new dollar lows.
The two-day meeting in Aylesbury, northwest of London, is also being
attended by top representatives from the European Union and
International Monetary Fund.
“Our task is to nurture the recovery,” British finance minister
George Osborne said.
The meeting began a day after the dollar cracked the 100 yen level
for the first time in four years, marking a 30 percent climb since last
September as Japan sharply expanded its stimulus program, aiming to pull
out of deflation.
The fall in the Japanese currency has given its domestic economy a
boost.
But economic rivals are worried that the Bank of Japan has
deliberately sought to push down the yen's value to gain international
competitiveness.
Japanese Finance Minister Taro Aso defended the policy Friday before
leaving Tokyo for the G7 meeting.
“We are not touching on the currency market but rather trying to exit
from deflation,” he told reporters.
Kathy Lien of BK Asset Management said the yen's fall was predictable
and didn't foresee a reversal soon.
“The Bank of Japan has eliminated any reason to buy yen over the next
two years and local investors are finally beginning to realize it,” she
said.
The dollar also gained on the British pound Friday: the pound slipped
to $1.5354 from $1.5451. And the dollar rose to 0.9560 Swiss francs from
0.9479 francs.
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