Currency wars: special focus

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Call it what you will – currency war, competitive devaluation, currency manipulation, currency intervention – but central banks are knee-deep in the trenches as they battle to lower their exchange rates and boost their economies.

A post-Lehman global currency war has kicked off since 2010 and has intensified this year.

Competitive devaluation, as it is also known, involves central banks – today most prominently the Bank of Japan (yen/JPY), People's Bank of China (renminbi/RMB), Central bank of Brazil (real/BRL) and Swiss National Bank (Swiss franc/SFr) – battling it out to boost exports or bring down exchange rates to perceived fundamental value. But, with huge monetary stimulus in Europe, Japan and the US - countries that face weak domestic demand - global trade tensions have emerged at the forefront of the policymakers' concern from Washington to São Paulo.

Policy tools used for currency manipulation or intervention include direct government intervention, the imposition of capital controls and, indirectly, quantitative easing.

Recent Euromoney currency war coverage

FX: China ponders implications for renminbi of Trump victory
November 2016

Trump China monkey-R-600
If the US did open hostilities in a currency war with China, it might fear its own economic casualties.

Don’t believe the currency-war hype on Japan 
May 2016
Japan could realize its goal of a weaker yen without the need for FX intervention, say analysts.

TPP add-on aims to address Congress concerns over FX manipulation
November 2015
Hillary Clinton-R-600

The Trans-Pacific Partnership (TPP) has been criticised in the US for ignoring the question of currency manipulation. The US Treasury hoped it could appease those concerns with a joint declaration by the countries involved, pledging to avoid such practices – but critics look far from convinced.

Stronger RMB, stronger China
March 2015
As global currency wars intensify, calls grow louder for China to weaken the renminbi to jump-start its sputtering export machine. 

Inside investment: Hobbesian option
December 2014
A war of all against all in currency markets will not be pretty. For some countries it may also be too little, too late. The International Monetary Fund has failed in its role as the arbiter of currency values.

Dollar, as reserve currency, is a virtue, not a trap: a response to Eswar Prasad
January 2014
Forget the doom over currency wars – the dollar-led monetary system boosts global stability, while China’s fixed exchange-rate regime poses risks, argues the IIF’s Charles Collyns, a former US Treasury official, as debate rages over the role of the dollar in the emerging world, in particular.

Deflation fears to renew currency wars as ECB poised for QE, say analysts
January 2014
With global economic growth still stuttering, currency depreciation has become a zero-sum game for central banks, and recent developments in some key currencies have shown that fears of an inflation undershoot or outright deflation will remain an important driver for their currency policies.

Australia steps up the currency-war rhetoric
December 2013 
Australia has stepped up its assault on a perceived overvaluation of its currency, but might well have inadvertently set up a soft floor in its currency.

Czech koruna among the most vulnerable to a dollar rebound  
November 2013

Intervention threat for Australian dollar

October 2013

China sows seeds for next global downturn
  
September 2013

Dark clouds hover over emerging markets as US Federal Reserve spoils rates party
June 2013

Inside investment: Central banks, credit bubbles – where it stops, nobody knows
May 2013

Yen weakness only halfway through  
April 2013

Ukraine: hostage to Cypriot fortune
March 2013

Sterling vulnerable to fresh slide; caution required over currency war reboot
March 2013

Banks and hedge funds hope to profit from currency wars
March 2013

Bird's-eye view of emerging markets in the global currency wars
February 2013

Italian election slams FX market back into crisis mode; currency wars take a back seat
February 2013

Yen slide built on hot air, but Japan’s reflation could have "once in a generation" impact
February 2013 

EM policymakers to sit out the currency war as EM FX correlation hits decade low
February 2013

Sterling: turning Japanese
February 2013

Shut up about currency wars already
February 2013

Yen exchange-rate misalignments overstated; renminbi a better focus of currency hostilities
February 2013

G7 memo to Japan: don’t mention the currency war
February 2013

Mario Draghi: the grand old Duke of Frankfurt
February 2013

Further yen weakness needs action, not words
February 2013 

Further euro strength could prompt ECB rate cut
February 2013

The joy of forex – introducing the currency sutra
February 2013

Sterling safe from currency war
January 2013

Europhoria takes single currency to new heights
January 2013 

Currency wars: a handy guide
January 2013

Currency wars – expect words not action
January 2013

Do not expect the eurozone to wage currency war
January 2013

Lost in translation: yen weakness enters new phase
January 2013

China hard landing could still blow up world - Société Générale
January 2013

Don't bet against the return of FX volatility in 2013
January 2013

Swiss National Bank notches up a victory, but Swiss currency war continues
January 2013

Foreign exchange: Toxic macro/monetary mix spells danger for euro
January 2013

Don't bet against the return of FX volatility in 2013
January 2013

ESM bond purchase is no back door yen intervention 
January 2013

The renminbi and cross-border trade: sightings of Bigfoot
January 2013

Currency managers go exotic in search of profits
January 2013

Brazil economy: is the party over?
January 2013

Beyond inflation – Brazilian style
January 2013

Special focus: The future of the RMB
January 2013

Outlook: Cautious optimism prevails in harsh macro-risk environment
January 2013

Against the tide: A year of economic porridge
December 2012

Four things that could upset the consensus in 2013
December 2012

Bearish take on the besieged Bank of Japan
December 2012

UBS warns on euro-swiss franc floor
November 2012

Buying dollar-yen: This time it could be different
November 2012

Be smart to find returns in foreign exchange
November 2012

HKD intervention: it could get ugly
October 2012

Fed defends quantitative easing amid 'currency war’ fallout 
October 2012

Phoney currency wars – this time it's different
October 2012 

Japanese stimulus – a likely dud
October 2012 

Australia not the new Switzerland; RBA FX intervention impotent
October 2012

Switzerland hopes for a happy anniversary; talk of a rise in EURCHF floor
September 2012

Monetary suicide and the emerging markets-shaped noose
August 2012

What unites gun-toting Texans and Beijing in their sympathy towards a gold standard
August 2012 

Brazil policy U-turn materially improves BRL outlook; currency war truce called
June 2012

Mantega talks of war as Dutch disease diagnosed
April 2012

Mantega needs to move war to home soil
April 2012 

Central banks bring tail risk challenge to FX markets
April 2012

The currency ceasefire
January 2012

US 'uses China as scapegoat’ with currency bill
October 2011

Out of options: Even unprecedented central bank intervention can’t save the global economy now
September 2011

FX derivatives fight history and a currency war
September 2011

Volumes and volatility benefit in currency wars
November 2010

Fighting weapons of mass liquidity
November 2010

Brazil raises tax to stem inflows
November 2010

Central banks: Switzerland ups the ante
April 2009

Devaluation: Ready, steady, devalue
March 2009

Competitive devaluations: SNB intervenes
March 2009