Fears of a “currency war,” in which countries devalue their currencies to gain a trade advantage, dominated headlines last week ahead of the weekend meetings in South Korea of the finance ministers from the 20 leading economies that make up the Group of 20 (G-20). Last week, U.S. Treasury Secretary Tim Geithner, who also attended the meeting, publically commented that the U.S. desires a further depreciation of the dollar against the Chinese currency. He also noted that “the major currencies…are roughly in alignment now” a suggestion that he sees no need for the dollar to fall further against the euro and yen; however ……

 

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