Markets welcome G20’s stance on foreign exchange but wary of trade split
Financial leaders from the world’s biggest economies agree on foreign exchange but not on trade
London — Financial leaders from the world’s biggest economies found common ground on foreign exchange at a G20 meeting on Saturday but failed to agree on trade, highlighting a global shift towards protectionism and setting a cautious tone for financial markets next week. The Group of 20 powers meeting in the German spa town of Baden-Baden reiterated their long-standing warnings against competitive devaluations and disorderly FX markets, allaying fears that the new US administration might have opened up a chink in the G20’s united front on global currency policy. For markets, no change to G20’s stance on FX is welcome news. Having the world’s financial and economic powers on the same page should help keep FX volatility low, a cornerstone for stable markets and rising asset prices more broadly. But failure to agree on a commitment to keep global trade free and open will have negative consequences for financial markets, even if not dramatically so immediately. "We may open on Monday wi...
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