The US dollar was broadly weaker this morning, even against the euro, after finance ministers at the Group of 20 meeting pledged to maintain their stimulus programmes.

This calmed investors who previously feared the premature removal of economic stimuli may lead to a double dip recession. As a consequence, it also dampened demand for safe-haven US-dollar denominated Treasuries. Last week’s dismal US unemployment figures may have also weighed on the dollar, as it reinforces the view that US policymakers will keep interest rates at historic lows for at least another year. An International Monetary Fund (IMF) report has stipulated that the low American interest rates have transformed the US dollar into a carry-trade. ‘There are indications that the US dollar is now serving as the funding currency for carry trades,’ the IMF report published over the weekend revealed. ‘These trades may be contributing to upward pressure on the euro and some emerging-economy currencies.’ A carry trade is a strategy in which an investor sells a certain currency with relatively low interest rates and uses the funds to buy a different currency with a higher interest rate, making a profit on the interest rate differential.