The U.S. dollar may probably slow down in its currently strong bearish trend against the other world currencies after the G7 meeting participants expressed their concern about the Forex market fluctuations.
The housing and financial crisis in U.S., which is observed since Summer 2007, made traders believe that the worlds largest economy is heading into recession. The dollar cumulative index (DXY, a measure of the currencys strength versus its 6 main counterparts) fell about 6.4% since the beginning of 2008.
The Group of Seven nation meeting was held on April 11 in Washington D.C., U. S. The statement was one of the first in years to include the important mention of the currency market situation:
Since our last meeting, there have been at times sharp fluctuations in major currencies, and we are concerned about their possible implications for economic and financial stability We continue to monitor exchange markets closely, and cooperate as appropriate.
Currency analysts believe that G7 concern with the dollars fast depreciation may have some real affect on the Forex market in a long term period. The current statement was the first major shift in the G7 view on the currencies since a February 2004 meeting in Boca Raton, Florida, U.S.
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