World stocks up as G-20 vows to avoid currency war

LONDON — World stocks rose and the dollar slumped Monday after global finance chiefs vowed to avoid a currency war that could derail the global recovery. With no concrete guidelines to go by, however, investors are wary that this may only prove a temporary truce.

Finance ministers from the Group of 20 developed and emerging countries promised to avoid competitive devaluations – weakening a national currency to help exports and sustain economic recovery – but offered no binding targets for evening out trade imbalances.

Analysts said firmer guidelines may yet be delivered at next month’s meeting of world leaders in South Korea, though sharp differences in views remain. For the time being, the weekend’s promises were enough to calm investors’ fears of a currency war and focus attention on the main economic event on the horizon – the Federal Reserve’s expected expansion of the U.S. money supply, an attempt to boost growth that markets fear could also weaken the dollar.

Read Full Article