James Alexander Michie: World markets in possible risk | Bloomberg

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Currency War Erupts, Threatening to Ripple Across Global Markets | James Alexander Michie

Author: James Alexander Michie

The currency war has arrived and it is possible that it will affect the world markets. Donald Trump accuses China and the European Union of manipulating the currencies and lower interest rates of their respective nations. Comments were made on the issue after the yuan fell to its lowest level in a year followed by a decline by the euro this year.

Likewise, the world’s largest economies are part of a risky game, possible consequences arise that could be disastrous to such an extent that they could affect beyond the US and Chinese currencies, including everything as well as oil and gas equities. Emerging markets assets, this could turn into collateral damage while the current global financial order takes hits from Beijing to Washington and according to Trump certainly could be changing things, from a trade war to a currency war.

It is likely that prices will fall progressively while worries about growth increase, affected the money of those nations that are exporters of raw materials if like the Russian ruble, the Colombian peso and the Malaysian ringgit before demolishing the rest of Asia, In fact, according to Robin Brooks, who is chief economist at the Institute of International Finance and a former exchange strategist at Goldman Sachs Group Inc., it is possible that Asian central banks will initially try to curb the weakness of the currency through intervention.

On the other hand, it is assured that the United States keeps China insight and if it has manipulated its exchange rate arguing that the weakening of the currency has created an unfair advantage for that nation and that for this reason EE. UU will be on the watch by carefully monitoring and reviewing if the coin has actually been tampered with.

However, hedge funds and other speculators could be considered optimistic regarding the currency since February 2017 according to data published by the Commodity Futures Trading Commission.

Take a read: https://www.bloomberg.com/news/articles/2018-07-20/currency-war-erupts-as-trump-blasts-china-eu-for-manipulating

Source: Katherine Greifeld | Bloomberg


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