QE3 Is Expected To Detonate Currency Wars.

Japan follows up on Swiss intervention in foreign exchange market

With the global economic growth again experiencing a trough, the clarion call of "currency war" has once again begun to blow. Over the past two days, Switzerland and Japan have announced a high-profile announcement to ease monetary policy or sell their currencies. Measures Intervening in the foreign exchange market to curb the strong momentum of the domestic currency.

On the morning of 4, Japanese finance minister Noda Kahiko announced that the Japanese government and central bank began selling yen in the foreign exchange market that morning, and opened the curtain of second intervention in Japan since the "3. 11" earthquake. In order to cooperate with the government's intervention, the Bank of Japan also rushed to the end of the two day conference on Thursday, and announced that it would expand its assets acquisition by 10 trillion yen after the meeting.

Affected by intervention factors, the US dollar rose sharply against the yen on the 4 day, breaking away from the previous four month low. On the 4 day, in the early morning of Europe, the US dollar stood at the 80 pass against the yen, which rose by more than 4%.

Japan's foreign exchange intervention also triggered a chain reaction in the global market. The US dollar index rose 4 in the European market for 1.2% days, dragging down crude oil, basic metals and [15.73 -2.05% shares of agricultural products, and so on. The commodities fell by more than 1%. Gold is still thriving.

O'neal, President of Goldman Sachs, believes that the two dangers of the Japanese yen and the Swiss Franc are risk aversion. currency Both of which have soared and triggered government intervention. One important background is that the recent deterioration of the US economic outlook has brought sharp fluctuations to the global market.

Analysts pointed out that with the recent US and European economies "two bottom" risk once again emerged, and the sovereign debt crisis has limited the fiscal stimulus space, and the market for the central bank may play a more important role in the economy is expected to increase sharply. In the United States, discussions on the third round of quantitative easing monetary policy (QE3) have been heating up recently.

On the 4 day, many central banks in the eurozone, the United Kingdom and Russia announced that the interest rate remained unchanged for the time being, considering the increased risk of economic growth. The Central Bank of Turkey even unexpectedly cut interest rates by 50 basis points to stimulate the economy.

The gloomy economic outlook not only affects foreign exchange markets but also setbacks. equity market 。 On Thursday, the US stock market opened sharply, and the European stock market also plunged. At 22:15 Beijing time, the three major U.S. stock indexes dropped by more than 1.2%. European markets in the UK, Germany and France fell by more than 2%.