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We’re back to currency wars, and here’s why that is bad for markets
Who wants a strong currency these days? Apparently nobody does. Having a strong currency appears out of favour, judging by the latest spat between global policymakers. Once it used to be a talisman for national economic success, but these days having a weaker currency seems the favoured tool for forging stronger growth and gaining an edge over trade rivals. Trouble is, if everyone joins in, it becomes a no-win, zero-sum game. The US has suddenly declared it wants a weaker dollar and suddenly the euro zone is flinching from a stronger euro. A weaker yen is part of Japan’s game plan to beat deflation and all China ... (full story)
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