Halister News

(Bloomberg) -- This week’s G-20 gathering is one of the most highly anticipated meetings since the striking of the Plaza accord in September 1985. If some sort of coordinated action to calm volatile global currency markets emerges in Shanghai, its credibility will hinge on agreement between just two countries: China and U.S.

• The largest disruption to FX markets so far this year is the surging Japanese yen, which in early February advanced at a pace last seen in 1998. Yet, the yen’s surge traces its origin back to August when China devalued its currency
• How times have changed: China wasn’t among the five power- broker nations at the Plaza that agreed to weaken the dollar. And France and Germany no longer have their own currencies
• The most significant statement on markets this year wasn’t the BOJ’s adoption of negative rates. It was PBOC Governor Zhou Xiaochuan breaking months of silence in a magazine article to say there’s no basis for continued yuan depreciation
• Relative calm in G-10 forex markets after the Lunar New Year break is mostly attributable to reduced yuan volatility
• The cameras may be focused this week on group shots of 20 officials looking out over the Huangpu River, but the real action will be off stage between the big two
• Mark Cranfield is a foreign-exchange strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice.