The four-year-old global currency war rages on.
In the latest skirmish, Singapore's Monetary Authority, which deploys its dollar as the principal policy lever, said Wednesday that it will seek slower appreciation of the currency, sending it to a four-year low against the U.S. dollar.
Singapore thus joins countries around the world — excluding the United States — that are using monetary policy to devalue their currencies. The hope is that the devaluations will boost exports, sparking the sluggish economies in these nations.
"For those countries that are engaging in this currency war, they have exhausted all the policy tools they have," David Woo, head of currency research at Bank of America, told The Wall Street Journal
Many experts expect the dollar, which hit an 11-year high against the euro Monday and a seven-year high against the yen last month, to keep rising.
"This is a multiyear dollar rally, and we're at the start of it," Stephen Jen, co-founder of investment firm SLJ Macro Partners, told The Journal.
The euro is trading around $1.1333, and Craig Johnson, senior technical research strategist at Piper Jaffray, says it could drop to $1. "Parity is in the future for the euro," he told CNBC and Yahoo Finance's Talking Numbers
"It's in everybody's best interest to see that currency [the euro] cheaper, so they can improve their exports. And it's ultimately positive for the entire globe," he said.
The euro touched a record low of $0.8252 in October 2000. It hasn't traded below $1 since December 2002. The euro began trading in January 1999.
"Since about 2003, we've been making a big distributional top" for the euro, Johnson said. "We broke through key support at about $1.20. The next real support comes in around basically $1.05 to $1.10."
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