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[quote=GUESTWAR,408263]According to FT Times, the Brazilian finance minister asserts that “there is a currency war going on follows a recent escalation of competitive intervention in the foreign exchange markets, with heavyweight powers armed with serious weaponry getting involved”.

Many nations have started to intervene in foreign exchange market. This year, Japan ended its six-year abstinence from intervening in the foreign exchange markets and sold an estimated $20bn of yen.

Switzerland started unilateral intervention against the Swiss franc last year for the first time since 2002 and did not sterilise it by buying back in the domestic money markets what it had sold across the foreign exchanges.

In common with several East Asian countries, South Korea, host of the Group of 20 summit, has been intervening intermittently to hold down the won during the course of this year.

The US won’t see this as a good sign. It is considering of assembling an international coalition of countries at the forthcoming G20 meeting to put pressure on China over its interventions to prevent the renminbi rising.

Although some argue that a generalised burst of foreign exchange intervention could act as a global monetary easing, a more widespread view is that such a round of competitive devaluation is more likely to inflame international tensions.

Like the Brazilian finance minister said, a currency war might happen. 
[/quote]

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