Competitive Devaluations: Is a post-COVID Currency War Coming?

Almost a decade after Brazil’s finance minister likened Western central bank money-printing to economic warfare, some of the conditions that led countries to weaken their currencies then look to be forming again.

By Marc Jones, Elizabeth Howcroft

RIO DE JANEIRO, BRAZIL - Financial markets’ euphoric reaction to the recent COVID-19 vaccine breakthroughs and U.S. election results is pushing some currencies up so fast that rumblings have begun about a potential new FX war.

Almost a decade after Brazil’s finance minister likened Western central bank money-printing to economic warfare, some of the conditions that led countries to weaken their currencies then look to be forming again.

Investors’ growing eagerness to buy into risky assets gave emerging market currencies their best month in nearly two years in November, stretching a run . . .

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