Despite currency markets being on edge last week wondering what the G-7 would say regarding foreign exchange rates, in the end, the policymakers didn't say anything. Rather, the United States, Canada, Germany, France, Italy, Japan and Britain, meeting in France alongside Russia, focused on individual nations' longer-term economic reforms. The statement made no reference to currencies or foreign exchange markets despite a recent steep slide of the U.S. dollar to four-year lows against the euro and two-year lows against the Japanese yen. One has to wonder what foreign exchange traders will make of Treasury Secretary Snow's comment that the dollar's decline against the euro has been nothing more than a "modest realignment." He also defined what he meant by a strong currency - a currency in which people could have "confidence" as a "medium of exchange" and "store of value." He said the dollar's specific value relative to other currencies "reflects the fundamentals of supply and demand for the currency." The Treasury later clarified Snow's statements saying the U.S. still supported a strong dollar policy.

Last Week's Highlights   •   Global Stock Market Indexes   •   Recap of Global Markets   •   Currencies   •  Indicator Scoreboard

The Bottom Line   •   Looking Ahead