USD Higher After Comments From IMF Managing Director

(CEP News) - The U.S. dollar is stronger across the board on Friday in the aftermath of commentary from the IMF voicing optimism that the greenback would retain its status as the world’s primary currency.

On Thursday, IMF Chief Dominique Strauss-Kahn said the “freefall” in the global economy may be starting to abate, and that he saw no reason for the dollar to lose its primary currency role.

According to a report from CNBC on Thursday, the results of the U.S. stress tests on the largest financial institutions in the United States will be released on May 4, and the government will release advance guide clarifying the test assumptions on April 24.

A spokesperson from the Obama administration on Thursday said the government wanted to release the results in a way which would allow the public to compare the banks.

The Japanese ruling party has proposed legislation to buy stocks if shares fall to unreasonable levels. If accepted, the law would remain in place through 2012.

On Friday, Bank of Japan Governor Masaaki Shirakawa met with European Central Bank President Jean-Claude Trichet to discuss the global financial markets and the economy.

In at a press conference, Shirakawa said the declines in Japanese exports should ease but that consumer spending and capital investment will continue to deteriorate further. Nevertheless, the worse may have passed for Japan.

Meanwhile, European Central bank President Trichet said everything must be done to help boost confidence and return the global economy onto the path of prosperity. He also warned market participants against developing expectations for the May 7 rate decision.

Japanese Finance Minister Kaoru Yosano told reporters that it will be difficult for the government to balance its budget by fiscal 2011, and it may need to set another “milestone.”

Speaking in an interview with the UK’s Daily Mirror, outgoing Bank of England Monetary Policy Committee Member David Blanchflower said the UK should focus on aid for the labour market in its budget.

U.S. equity markets are mixed despite better than expected earnings results from Google, Citigroup and General Electric over the last 24 hours, with contracts on the Dow Jones Industrial Average up 26 points to 8089, the S&P 500 up 2 points to 864 and the Nasdaq down 3 points to 1349.

All data taken at 8:09 a.m. EDT,

Euro/USD down 1.21 cents to 1.3065

USD/CAD up 0.44 cents to 1.2117

USD/Yen down 0.01 points to 99.27

GBP/USD down 1.40 cents to 1.4787

AUD/USD down 0.01 cents to 0.7205

The U.S. Dollar Index is up 0.57 points to 85.80

By Erik Kevin Franco, efranco@economicnews.ca; edited by Nick Say, nsay@economicnews.ca

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