Author : Carnesia Deswara Chandra - 1801400480
Yes, just like the title said, there's a currency war going on. As we know that, 2014 was the year of the U.S dollar, certain currencies gained value against the dollar. Now a strong dollar is a good news for anyone who's planning a trip overseas but of course it's not the same for anyone who's planning to sell stuff out there. Why it's rising? The simplest explaination is; the stronger your economy, the stronger your currency. Many local currencies lost value against the dollar. The most tragic one is EURO.
Yes, just like the title said, there's a currency war going on. As we know that, 2014 was the year of the U.S dollar, certain currencies gained value against the dollar. Now a strong dollar is a good news for anyone who's planning a trip overseas but of course it's not the same for anyone who's planning to sell stuff out there. Why it's rising? The simplest explaination is; the stronger your economy, the stronger your currency. Many local currencies lost value against the dollar. The most tragic one is EURO.
credit goes to www.slate.com
As we can see there, U.S dollar started a strong move in the beginning of 2015 makes the EURO came to its lowest level. The rapid decline of the EURO raise the possibilities of parity between EURO and U.S dollar. Among the 52 world currencies that the IMF monitors, the fastest devaluating currencies happpened in Russian ruble that lost value reached until 21.1% of change which is more than 7% difference with Indonesian Rupiah lost value against U.S dollar in 2014. Seems likeUkraine and Crimea issues made Russia had to go through tough times in 2014. , the flight of capital outside the country made a blow on the fall in oil prices
. Among European countries, the British pound lost value of more than 5% while Norwekian krone lost average of 7% against the dollar.
. Among European countries, the British pound lost value of more than 5% while Norwekian krone lost average of 7% against the dollar.
In Asian region, it was not only developed countries that lost value against the dollars, but some rich countries such as Japan lost value on average 8% while Indonesia lost value on 13.7% against U.S dollar. Japan, which has been a good countries for decades, trying to get its economy out of the low inflation and finally buying bonds with newly printed money.
The only way to lose a currency war is to refuse to fight it, and let yours go up too much. The dollar is already going to go up plenty more no matter what we do, but we can at least try to limit the damage. - Matt O'Brien
The raise will continue in this year and of course it will result in the contination loss of values of curriencies like what happened in 2014. The U.S dollar will continue to raise the interest rate up to more normal level, not gonna baby-sitting countries that are devaluing. The world may ultimately be heading toward a global managed exchange rate regime.
