Dollar’s Reserve Status Questioned
Speculation and rumors about the US dollar’s status as the world’s reserve currency have been widespread. Interbank forex exchanges around the world have been paying particular attention to these rumors and statements. The replacement of the dollar as a reserve currency would seriously disrupt currency markets including the interbank forex.
Dollar’s Reserve Status Will Not be Topic at G 20 Summit
In January the dollar was called into question by Russia’s Vladimir Putin. More recently China expressed concerns about the dollar and many interbank forex brokers expected it to be a topic of discussion at the upcoming G 20 conference in London. Recent comments by both Japanese and Russian officials say that the topic will not be discussed at the G 20 summit.
Geithner’s Remarks Questioned in Congress
In the US Minnesota Representative Michelle Bachmann asked Treasury Secretary Timothy Geithner and Federal Reserve Chair Ben Bernanke to “categorically renounce the United States moving away from the dollar and going to a global currency.” Representative Bachmann has also introduced a bill in congress that”would bar the dollar from being replaced by any foreign currency.” Interbank forex brokers took note of a contradictory remark by Treasury Secretary Timothy Geithner that he was open to the idea of an international reserve currency.
German Finance Minister Warns of Euro’s Decline
For now, the US dollar’s status as the world’s reserve currency seems to be safe. This week the Euro experienced a serious decline against the dollar. Last week many were predicting a good week for the Euro on interbank forex markets. Remarks by Peer Steinbrück, German finance minister, put pressure on the Euro. Steinbruck warned that fiscal irresponsibility in Europe threatened the Euro’s future.
G 20 Summit to be Closely Watched
Next week’s G 20 summit in London is sure to draw the attention of interbank forex brokers and investors. Quite possibly interbank forex brokers and traders can get a glimpse of what various governments will do to address the ongoing global recession.
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