G7 Meets in Rome

On Friday the US dollar gained against the Yen and fell against other major currencies including the troubled Euro. All eyes were on the G7 conference taking place this weekend in Rome. The G7 meeting is expected to influence currency markets and affect forex investment opportunities. A G7 statement released late Friday mentioned no specific currencies except China’

s Yuan. China has committed to more flexible exchange rates which could lead to a stronger Yuan and increased forex opportunities provided by the currency.

Japan to Move Against Excessive Currency Moves

Many forex brokers thought that the statement would specifically mention the Japanese Yen but no statement was forthcoming. Japanese Finance Minister Shoichi Nakagawa stated that the Japanese government will move against excessive currency moves. British Chancellor of the Exchequer Alistair Darling said that any discussion of currencies would be “in general terms.”

Stocks to Influence Forex Opportunities

Many forex brokers believe that there would be no mention of the Pound and the Yen and expect Forex markets to follow the lead of equities markets which will enable them to predict forex investment opportunities. Shaun Osborne of TD Securities stated, “We are still hinging on risk appetite and we are keying off equities. That story on mortgage subsidy gave equities a lift including the dollar versus the yen and there’s still some carry-over from that.”

Markets React to US Stimulus Plans

The US dollar and the Japanese Yen traditionally signal either risk aversion or risk appetite. The rising number of mortgage defaults in the US has caused a credit crisis with many banks unwilling to lend which has crippled the global economy. Markets were pleased with the news that the Obama administration has proposed a plan to help prop up the troubled US housing market.

Investors Remain Cautious

There were signs of optimism Friday but many investors remained cautious waiting for news from the G7 conference. Even a slight short lived return to risk appetite provides investors with increased Forex opportunities. Trading is expected to be light on Monday as US markets close for President’

s Day. The G7 conference ends Sunday and Forex brokers will be waiting for the final statements from the meeting. Hopefully we will see news that indicates a turnaround in the global economy.