The dollar gained on a renewed bout of risk aversion against the higher-yielding euro, pound and Australian dollar after G7 finance ministers urged Treasury secretary Timothy Geithner to move faster in implementing a solution for the banking crisis and said the “severe” downturn will persist through 2009. Geithner was told by foreign policy makers at weekend talks in Rome that speed was of the essence, although Mr. Geithner did receive high marks after presenting the U.S. government's plan.
“The question is implementation and execution,” Bank of Canada Governor Mark Carney. “It is a comprehensive plan, the intent is there, the will is there.”
French Finance Minister Christine Lagarde, who arrived saying she was “very impatient” for more details, said Geithner answered questions “very clearly.” Geithner’s plan “looks great,” said Lagarde. “The essential thing is now to implement it.”
For his part, Geithner stressed the importance of following the U.S.’s lead in enacting aggressive policies to rally their own economies.
“Given the severity of the current economic and financial environment, these actions must be forceful and sustained for a period that matches the likely duration of the crisis,” Geithner said.
Geithner also took time to praise Beijing for "playing a very important stabilizing role in the international financial system,' after having just weeks ago accused China of manipulating its currency to gain an edge in foreign trade. The U.S. signed onto a statement issued after the meeting which welcomed "China's fiscal measures and continued commitment to move to a more flexible exchange rate," in a shift that reflects the West's eagerness for Beijing's help in resolving the global financial crisis.
Mr. Obama is expected to join Chinese President Hu Jintao during the April summit of the Group of 20 in London, a collection that includes the G-7 powers as well as rising nations from the developing world including Russia, India and Brazil.