LONDON — A pledge by the Group of Seven most powerful economies to avoid a global currency war pushed stocks higher on Tuesday while dragging the dollar lower against the Japanese yen and the euro.
The G-7 nations, which include the U.S., Japan and Germany, said their economic policies should be “oriented towards meeting domestic objectives and not towards setting specific exchange rates.”
That was meant to ease concerns that major economies were retooling their monetary policies to specifically weaken their national currencies to help domestic exporters.
Such worries began after Japan announced in December a new ultra-loose monetary policy that caused a sharp drop in the yen against other major currencies. With all major economies struggling to recover from the financial crisis, that raised the specter that global central banks might race to loosen monetary policies to weaken national currencies.
Read More at OfficialWire . By Carlo Piovano.