| Not too long ago, the Swiss National Bank (SNB) gave up the peg it had maintained for years between its franc and the euro. Market reaction was sudden. Within minutes of the announcement, the franc, or swissie as it is called in currency-trading circles, rose almost 40 percent against the euro. Several articles in the financial media described these events as the start of a “currency war.” That is a catchy phrase.
It is nonetheless misplaced. Recent and likely currency moves are much less a matter of targeted, warlike policies than they are a reflection of economic and financial fundamentals that have continued, and for the time being at least will continue, to favor the swissie and the dollar over the euro and most other currencies. The only targeted currency policy was Switzerland’s efforts to keep its franc cheap, and the central bank’s action signals defeat, not the start of a war...............................................Full Article: Source
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