Lots of developments in the trenches overnight in the currency wars. Brazil doubled the tax it charges foreign investors in an effort to dissuade hot money flows. South Korea told banks it intends to have a look at their derivatives positions in the KRW. Taiwan is telling banks to check documentation before allowing clients to purchase TWD…Not to mention Japan cut rates to zero and set up a fund to buy commercial paper and corporate bonds…
All and sundry are pulling all the levers of power to try and maintain export competitiveness in a low-growth environment in the developed world.
No one has played the currency debasement game as well as the Fed and it ain’t even tryin’… Just imagine what it could do to the dollar if it was a focus of its policies?
