The Illustrated Guide To 4 Years Of Currency Wars

 

While central bank intervention in the foreign exchange markets is nothing new, the last 4 years have seen unprecedented use of direct and indirect (jawboning) manipulation of exchange rates. As Goldman Sachs notes non-cooperative exchange-rate mechanics (i.e. currency wars) remains the new normal dynamic in world markets; and while some of the moves are generally consistent with cyclical (or structural conditions), efforts by central banks to 'manage' developed market rates in a low volatility range may come under further pressure with the Fed "tapering" as emerging market nations face money flow crises.

(click image for large legible version)

Chart: Goldman Sachs

source

Files:
20131220_fx.jpg  803 kb
Reason: