While the talk about the global currency wars is nothing new,
recent statements from the central bankers/policymakers in some
of the major countries indicate that 2013 may be the year of a
The term was coined by the Brazilian finance minister who said
that the loose monetary polices in the U.S. and the Europe were
hurting the emerging economies as the investors poured money into
higher yielding assets and currencies of the emerging
Brazil's government has been very active in its efforts to
stem the Real's appreciation, though capital controls and
Russia's central bank deputy chief said yesterday "we are on
the verge of very serious and confrontational actions in the
sphere…called currency wars".
EuroGroup chief Juncker recently said that "Europe is no
longer willing to be the last economic player holding the toxic
parcel of an over-valued exchange rate".
Bank of England Governor Mervyn King said in December
"concern is that in 2013 we'll see the growth of actively managed
exchange rates as an alternative to the use of domestic monetary
Japan's new prime minster Shinzo Abe has called for "unlimited
easing" by the BOJ.
Bank of Korea Governor stated a couple days back that the
nation will take an "active" response on the Won if needed.
Swiss central bank has expanded its portfolio of foreign
assets four times in the last three years in its efforts to keep
the lid on Swiss Franc appreciation.
China has always been suspected of manipulating its currency,
but the country actually allowed its currency to appreciate
against the dollar last year. Howver the new regime in China may
not be supportive of Yuan appreciation.
So, which currency will win the race to the bottom?
WISDMTR-CH YUAN (CYB): ETF Research Reports
PRO-ULS EURO (EUO): ETF Research Reports
CRYSHS-JAP YEN (FXY): ETF Research Reports
PWRSH-DB US$ BU (UUP): ETF Research Reports
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