Draft G20 statement doing the rounds

Reuters have the draft statement from the G20 fin mins and central bankers

  • Drops reference to resisting all forms of protectionism
  • G20 will maintain an open and fair international trading system
  • Will reaffirm previous exchange rate commitments
  • Drops phrase that G20 will refrain from competitive devaluations and won't target exchange rates for competitive purposes
  • Doesn't repeat prior phrase that excess volatility and disorderly movements in FX can have adverse implications for economic and financial stability

As this is a draft, take it with a pinch of salt but even so, the removal of the protectionism and devaluations phrases is a sign that that countries are starting to look inwards rather than outwards, and that is a big can of worms. If countries start messing willy nilly with their fx rates just to get an edge, rather than controlling extreme circumstances, that's one step closer to global trade wars.