22 Jan 2015
Currency wars live and sound? – Rabobank
FXStreet (Edinburgh) - Jane Foley, Senior Currency Strategist at Rabobank, sees the likeliness of another central banks following the strategy of lower the exchange rate in order to fight disinflationary pressures.
Key Quotes
“Assuming the ECB is successful in fighting its deflationary risks via a cheapening exchange rate, other central banks could be forced to take action”.
“The Danish National Bank last week cut interest rates to protect its EUR/DKK currency and further action is possible in the coming months to keep the value of the DKK closely aligned with the EUR”.
“Similarly, the SNB could yet be forced to cut rates further into negative territory too”.
“Although the Norges Bank and Riksbank have been insulated by the fact that their respective currencies weakened vs. the EUR last year, both of these central banks could yet cut rates again to protect their competitive positions”.
Key Quotes
“Assuming the ECB is successful in fighting its deflationary risks via a cheapening exchange rate, other central banks could be forced to take action”.
“The Danish National Bank last week cut interest rates to protect its EUR/DKK currency and further action is possible in the coming months to keep the value of the DKK closely aligned with the EUR”.
“Similarly, the SNB could yet be forced to cut rates further into negative territory too”.
“Although the Norges Bank and Riksbank have been insulated by the fact that their respective currencies weakened vs. the EUR last year, both of these central banks could yet cut rates again to protect their competitive positions”.