In its annual meeting, the G7 virtually ignored the situation in forex
markets. In previous years, the G7 used the so-called "communique,"
which essentially functions as a summary of the meeting, to rebuke
China for not allowing the Yuan to appreciate at a satisfactory pace.
This year, the RMB has appreciated markedly- by 9% on a trade-weighted
basis- and thus, the G7 opted not to apply further rhetorical
pressure. In addition, several of the most prominent EU member states
had hoped to work a discussion of the Dollar into the communique, but
alas, any mention was notoriously absent. Analysts have speculated that
this is due both to America’s political indifference towards the
valuation of the Dollar as well to a disagreement over what the correct
valuation should be, if indeed it is undervalued. Thomson Financial
reports:
"It was clear a few days ago that there was going to be no change in
the (currency section) of the communique and that really spoke of a
lack of consensus about mainstream currencies."
Read More: China spared ritual lambasting as yuan slips down G7 agenda
Original post by Jimmy Atkinson and software by Elliott Back
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