G 20 Facts

The G 20 nations are meeting this weekend in St. Andrews Scotland and traders and investors around the globe are watching intently. Even the most oblique reference to currencies will have analysts trying to decipher some hidden meaning that could affect currency exchange rates. The Group of Twenty Finance Ministers and Central Bank Governors or G 20 is a collection of finance ministers and central bankers representing 19 countries plus the European Union. The G 20 economies represent 85% of all global gross national product (GNP), is responsible for 80% of all global trade and represents two thirds of global population. In addition to member nations the G 20 also includes the International Monetary Fund (IMF0, the World Bank, the International Monetary and Financial Committee and the Development Committee of the IMF and World Bank.

G 20 Issues Communique

On November, 7 2009 the G 20 issued a communiqué which did not mention currencies directly. Earlier speculation had predicted that the G 20 would push for Asian nations to allow their currencies to appreciate. The communiqué pointed out that recovery has been uneven and the IMF has warned against pulling stimulus measures too fast. The IMF stated that growth has taken place but warned; “However, the pace of recovery is uneven, particularly in advanced economies, with consumer confidence remaining subdued, the waning of temporary fiscal measures such as the cash for clunkers programme in the U.S. and similar programmes elsewhere is slowing production.”

The IMF Weighs In

In their first communiqué the G 20 reflected the opinion of the IMF and said, “Economic and financial conditions have improved following our coordinated response to the crisis. However, the recovery is uneven and remains dependent on policy support, and high unemployment is a major concern. To restore the global economy and financial system to health, we agreed to maintain support for the recovery until it is assured.

There has been no further word about Asian currencies but the discussion is expected to take place before the meeting adjourns.

Quick Forex Tip: The International Currency Trading market has no central exchange like stock and commodities markets. Currency markets are dispersed throughout the world and the primary trading centers are, in order of importance, London, New York and Tokyo. The geographic dispersal means that markets are always open somewhere in the world and traders can jump on the internet and hopefully make very profitable trades at any time of the day.