Three months ago Joachim Fels, PIMCO Global Strategic Advisor suggested that the U.S. administration had gained the upper hand in the cold currency war it had been waging ever since it took office in early 2017, but recent developments suggest that it was premature to declare a U.S. victory.
The last meetings of the Federal Reserve and the Bank of England have fuelled sharp moves in the major currencies. The euro has extended its year highs against the dollar (it’s over 1,08 against the greenback) and on Thursday it appreciated over 1.3% against the pound (the exchange rate is at 0,86). Is near a new “currency war”?
James Alexander via Historinhas | In a “currency war” it pays to be the loser. If you need an expansionary monetary policy, like most currency blocs today, don’t let anyone undercut with dirty devaluations. So, when a big baby like China decides to lower the value of its currency versus the biggest baby of all, the USD, make sure you are not caught in the cross fire.
The Corner | March 11, 2015 | The market still points to emerging markets as one of the most vulnerable areas in the global economy. The absence of a rebound in the price of commodities (despite oil’s recent revaluation) is hampering these countries’ economic recovery.