US dollar overvalued

The IMF is out with some "staff" estimates for forex rates:

  • estimates US dollar overvalued by 8% to 16% compared to levels warranted by medium-term fundamentals
  • estimates Japanese Yen valuation broadly in line with medium-term fundamentals
  • China's real effective exchange rate broadly in line with fundamentals despite increasing current-account surplus
  • China foreign-exchange reserves rose by $129 billion in 2017 after declining by $513 billion in 2015 and $320 billion in 2016
  • high global account deficits and surpluses have become increasingly concentrated in advanced economies
  • persistent excessive current account surpluses and deficits could put global growth at risk, aggravate trade tensions

Pres. Trump will be happy about that report. Last week, he harped on the drag from the strong dollar.