Money and Metals

The Financial Times has this report on Asian resistance to the G7 move. "Asian currencies drifted lower in European morning trade on Thursday as Sadakazu Tanigaki, the Japanese finance minister, added his voice to claims that the recent meeting of the G7 did not call for dollar depreciation against Asian currencies. A swathe of Asian currencies have risen to their highest levels against the dollar since the 1997-98 Asian crisis in the ten trading days since the G7 meeting, which reiterated its call for greater currency flexibility in an effort to reduce global imbalances.'

'However the moves have led to a series of denials that the G7 was attempting to engineer dollar weakness, particularly against the currencies of Asia, and Mr Tanigaki added to the chorus when he said 'the market has misunderstood the discussion under way at the G7.'"

"'The comment is consistent with Fed chairman [Ben] Bernanke's comment that the G7 did not call for a weaker dollar and [European Central Bank] president [Jean-Claude] Trichet's comment that the statement was not a signal for euro appreciation against the dollar,' said Derek Halpenny."

"The comments led to a degree of selling of Asian currencies, with the yen slipping Y0.3 to Y113.89 against the dollar, the South Korean won Won5.5 to Won939.50, the Singapore dollar 0.6c to S$1.5792, and the Thai baht Bt0.23 to Bt37.805. The under-fire greenback also firmed 0.3c to $1.2601 against the euro and 0.25 centimes to SFr1.2388 versus the Swiss franc."

"Elsewhere the Canadian dollar continued to retreat from Wednesday's 28-year high against the greenback, falling 0.45c to C$1.1127, after David Dodge, the governor of the Bank of Canada, said the loonie's rally was not driven by fundamental factors and that markets and market analysts tend to 'overshoot.'"

"The South African rand also fell R0.084 to R6.1222 to the dollar as gold prices fell from a 25-year high."