The deterioration of the euro exchange rate of a new beginning for “currency war”
The deterioration of the euro exchange rate of a new beginning for “currency war”
Posted, March 22, 2015 20:04
BAGHDAD / follow Baghdadi News / .. indicates the deterioration of the euro exchange rate against the dollar once again to the “currency” that rotates under the central banks that want to activate its crisis-hit by currency economics of war.
The quake, which hit the financial system in 2008 and the debt crisis in Europe between 2010 and 2012 and the situation monetary institutions in the front lines, and all of them worked as a guardian of the national currency, to put all the forces in the battle to ensure the best conditions for its state cash.
He said Christopher Dimbik economist at Saxo Bank, “We are already in the process of monetary policy replaced the fiscal policy” because he “no longer have a government financial margins for maneuver.”
After the 2008 crisis, “the central banks intervened because the government was forced to back down very quickly because he had already spent more than its capacity,” he pointed Jack Patrick also a specialist in debt affairs at BNP Paribas.
For his part, shortened Eric Vanraas Director bond department in a box the Stordza Investments, based in Switzerland the situation, saying, “Everyone wants to push its growth and economic resort to that to the good old ways, any weakening the value of its currency to inflate its exports and achieve fast and secure an increase in the gross domestic product to.”
It is noted that Patrick Jack “currency weapon rarely formally constitutes the object,” and so the ECB has always said he did not have the goal of currency exchange.
This objective has not been formally drafted, “but the European Central Bank was thinking carefully to the extent that everyone is aware of it,” as Rene Difosé specialist at Natixis debt Affairs said, because “the exchange one of the main forms cranes which revolves around” to believe “monetary conditions most favorable to the advancement of the economy, “European.
The high exchange rate of the US currency to pay with the US Federal Reserve (central bank) to express concern publicly this week on the lips of his boss Janet Whelan about the “effect” strong dollar “price on US growth.”
Since all the central banks across the same role for the permanent correction procedures or through the use of exchange reserves has to keep its exchange rate within acceptable limits, the strategies are often conflicting. Hence highlights the term “currency war” that is used by specialists.
In such a situation, you find the most central banks durability itself logically in a position of strength.
Dimbik explained that “the most prominent central banks today”, ie the European Central Bank and the US Federal Reserve and the People’s Bank of China and the Bank of Japan “take the lead in this war, while other banks are moving late and trying to limit the damage.”
The episode of the most influential of this viewpoint was a strong decline the Swiss National Bank in mid-January for the policy, which was pursued by three years ago to prevent the Swiss franc from rising against the euro over the price.
But this parable is isolated. Has “decided 24 central bank this year to reduce its benefits rates. In mid-March, the Central Bank of Serbia and the Central Bank of Korea and the Central Bank of Thailand has taken the same decision as well,” followed suit Russia, as Greg Smith, an analyst at World First Foundation said.
And releasing it into the ninth of March historically a broad program to buy assets valued at up to 1140 billion euros by September 2016, the European Central Bank tipped the balance heavily on the dollar account.
He said Simon Smith, an analyst at the Foundation “FxPro” that “continuing in the dollar exchange rate increase poses a dilemma for the Federal Reserve,” especially because it is “offensive to the ability of exporters (the Americans) to maintain their competitiveness.”
He Vanraas “Since the month of August, the dollar exchange rate rose by 25 percent, almost in front of the exchange rate of the most prominent global basket of currencies.”
But he believed that “the question today is especially China: Since the yuan is linked to the price of the dollar, the Chinese central bank is the opposite of what has been done by the Swiss National Bank and lowers the value of its currency,” .anthy 21 / l
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