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Forex Flash: Global growth concerns in focus ahead of G20 meeting - BTMU

FXstreet.com (Barcelona) - Lee Hardman, FX analyst at the Bank of Tokyo Mitsubishi UFJ notes that the traditional safe haven currencies have continued to remain on a firmer footing this week as global growth concerns have intensified in the near term ahead of today´s G20 finance ministers meeting.

He sees that the price of copper which is seen as a key gauge of the global growth outlook has declined to its lowest level since October 2011 while the price of Brent crude oil has also fallen back below USD100/barrel for the first time since mid-2012. Understandably, he adds that the G10 commodity currencies of the Aussie, Loonie, Kiwi, and Nokkie are all underperforming in the current trading environment.

With regard to the G20, Hardman writes, “According to a Bloomberg report, the G20 statement will maintain the pledge from February to move more rapidly toward more market determined exchange rate systems and exchange-rate flexibility” and to refrain from competitive devaluations to support global growth. It appears unlikely that Japan will be singled out for criticism. US Treasury Secretary Lew stated yesterday that the BoJ’s recent policy action is aimed to boost domestic demand and is consistent with the G7 communiqué insofar as they will only purchase domestic instruments.”

Staying with Japan domestically, he adds that BoJ member Miyao speaking overnight confirmed that the BoJ easing may continue easing even after 2.0% inflation target is hit to make such rises “sustainable”. He finishes by writing, “The Nikkei has reported overnight that the BoJ’s updated Outlook Report released next week may forecast inflation hitting the target by spring 2015 according to unidentified people familiar with the bank’s thinking. The scale and duration of the BoJ’s monetary easing programme should continue to lead to sustained yen weakness ahead.”

Forex Flash: GBP/USD confirms resumption of down move with loss of 1.5154 - Commerzbank

The GBP/USD has finally sold off, which confirmed 1.5412/20 (recent high and the 38.2% retracement) as an interim high. “Loss of the 1.5154 uptrend will add weight to the idea that the market has resumed its down move. Below here will trigger losses to the 1.5028 (the 20th March low)”, wrote analyst Karen Jones, pointing to 1.5052 (61.8% retracement) as next support. “A break below here is needed to trigger another leg lower to the 1.4832 March low. Longer term we target 1.4229, the 2010 low”, Jones added.
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Forex Flash: China contemplates loosening Dollar peg- DBS Group

DBS group analysts note that the G20 Finance Ministers and Central Bank Governors will start a two-day meeting in Washington D.C.today.
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