Bubble Prevention Team Born

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"The G7 countries can decide to intervene in foreign exchange markets. If the exchange rate levels do not reflect economic fundamentals or if recent market movements have been so extreme that they have to be dampened, the G7 countries may take concerted action, implying that they will actively intervene in foreign exchange markets to support/weaken one or several currencies. The last time this happened was in 2000 to aid a very weak EUR. In 1985, 1987 and 1995 G7 countries also joined forces.

FXStreet concludes:

"However, the G7 countries do not always have to intervene physically. Verbal intervention can also be quite useful. The countries can express their views individually, but it has a stronger effect when the G7 backs a joint statement. After the meeting, a statement is presented and a single paragraph normally deals with exchange rates. The rhetoric of recent years' comments has not been particularly sharp or harsh, and focus has primarily been on China's reluctance to allow the CNY to appreciate fast enough."

Final footnote du jour, the IMF meets to consider (among other things) the sale of 400 tonnes of gold for budgetary shortfall reasons. It is expected that once the IMF has implemented such [other] budget savings, the IMF's main shareholders, including the United States [via Congressional approval], will allow the IMF to start selling some part of its very large gold holding to fill the IMF's present financing gap.

And the beat goes on...

Happy Trading.