Countries with strong currencies, face reduced demand for their exports:
“I would not want to be in machine tools in Germany at the moment,” said Adam Posen, president of the Peterson Institute for International Economics and a former Bank of England official. “I would not want to be in ship building in South Korea.”
The feeble recovery is tempting countries to weaken their currencies (by printing money):
European Central Bank President Mario Draghi has praised the euro’s decline, an indication to investors that a weaker currency is a key ECB policy objective. Bank of Japan governor Haruhiko Kuroda made similar remarks about the yen’s value. South Korea and China have come under fire for keeping their currencies lower than levels many economists say would reflect fair market values.
But this works only if you are the only country doing it. If rivals also weaken their currencies, the net effect is zero, a type of prisoners' dilemma.
Top finance officials trying to talk down the value of their exchange rates have resurrected warnings of a global currency war. Such tit-for-tat devaluations tend to create short-term growth at other countries’ expense.
To be honest this is very tough thing to say about, I am just not worried about these things instead I focus on simple stuff. I am doing Forex trading with top class broker like OctaFX, it is a brilliant broker with having superb conditions while they also have lovely daily market news and analysis service, it is easy to work out and always leads to greater benefits which allows me to make profits regularly and I feel very pleased with everything.
ReplyDelete