The European Central Bank’s intervention on Friday, 22 September in support of the falling euro, acting in cooperation with the Bank of Japan and the US Federal Reserve, briefly evoked memories of the 1985 Plaza accord which successfully drove down the dollar. But the time when world central banks could dictate exchange rates to the markets have passed.
Market participants did widely welcome the intervention as “a clear signal that the ECB is not standing by watching the risk of a potential crisis increase further,” says Julian Callow, chief European economist at Credit Suisse First Boston.
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