More than a dozen countries, including some of the largest, have been intervening in the foreign exchange markets to weaken their currencies. This raises fears of "currency wars" like those that devastated the world economy in the 1930s. A new study by the Peterson Institute for International Economics distinguishes sharply between those countries whose intervention is justified, because their currencies are already stronger than called for by the economic fundamentals, and those who are violating their international obligation to avoid "competitive devaluation" because their exchange rates are now substantially undervalued.
For more info: News Release: Fighting the "Currency War"
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