While it is a bit dramatic to suggest that a global currency war is underway, the falls in interest rate expectations in overseas markets relative to those at home explains why the Australian dollar has strengthened to a six-week high of US$0.72. The RBA is unlikely to be too concerned unless the dollar rises above US$0.75. But if that happened, it might have to take up arms and join the war.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services