G7 'indifference' further weakens dollar

Dollar weakness has been undermining financial markets for weeks, but the currency has fallen yet further after an inconclusive G7 meeting.

The euro has been the major beneficiary as the dollar has fallen, with the single European currency hitting new highs against the greenback of $1.4319 on Friday, before soaring as high as $1.4348 in Asian trading this morning (October 22nd).

Euro values subsequently settled back to $1.4326, but the dollar has also slipped to a six-week low against the Japanese currency, falling to around 113.20 yen.

Apparent indifference to the weakness of the dollar at the weekend's G7 meeting was seen as the spark to a further selling off of the US currency, as investors saw no indications of moves to bolster its value.

Michael Woolfolk, senior currency strategist at the Bank of New York Mellon, told Reuters: "The G7's statement effectively gives a green light to continue selling the dollar."

The upshot of perceived indifference to the fall of the greenback was a worrying slide in US stocks, with Wall Street staging its largest fall for two months, on the fateful 20th anniversary of 1987's Black Monday crash.

With the dollar consistently weakening, the outlook for those looking to buy gold has been bolstered, as the precious metal profits from its perceived alternative monetary value to the US currency.