Calm hoped for on foreign exchange markets after G20

Experts are hopeful that the foreign exchange markets will begin to settle down this week following the conclusion of the G20 summit in London.

It is hoped that the agreement to provide a $1.1 trillion (£681 billion) package of measures to help boost the global economy will help the world's foreign exchange markets to return to pre-crisis levels.

Last week, the markets remained relatively volatile as investors considered the impact of the G20 meeting and weighed up the results that the measures are likely to bring.

However, it is hoped that now the summit has been completed and experts have analysed the outcomes, the foreign exchange markets will begin to settle down.

The G20 announcement also coincided with a decision by the European Central Bank to cut interest rates further as it attempts to stimulate growth within the eurozone.

Despite starting the week at 1.3225, the euro fluctuated as events in London changed on a daily basis, finally settling at 1.3486 on Friday.

Sterling also had a week of fluctuations, but eventually rallied aggressively on the back of the successful conference.

The G20 meeting between the leaders of the world's largest financial countries was hailed as an "historic" occasion by US president Barack Obama, who welcomed the moves by all the leaders to reach a deal to boost the global economy and fight the recession.

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By Paul Jarvis