Tuesday, February 12, 2013

The currency market cold war could soon turn hot | Larry Elliott | Business | The Guardian

The currency market cold war could soon turn hot | Larry Elliott | Business | The Guardian: It's easy to see why there are tensions in the world's currency markets. Austerity programmes mean countries are relying heavily on monetary policy to get their economies moving. Central banks have kept interest rates at rock bottom level and – in many cases – printed new money through quantitative easing. Both strategies tend to reduce the level of a currency, making it easier for countries to pursue export-led growth. As a result the US and the UK see a lower exchange rate as a beneficial side effect of QE.

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