The currency war rages on, with the Swedish central bank becoming the latest to cut interest rates in an effort to devalue its currency and boost its economy.
The war carries great risk to the global financial system, experts say.
Central banks around the world, outside of the Federal Reserve, are pushing their currencies down with monetary stimulus. As a result, the dollar has soared to multi-year highs against a range of currencies in recent weeks.
Currency wars are dangerous, of course, bringing great pain to participants on all sides.
"The chief threat from a global currency war is that it will lead central banks to take up monetary stances so extreme that they damage the smooth functioning of financial markets," Stephen Lewis, chief economist at Monument Securities,
told Ambrose Evans-Pritchard of The (London) Telegraph.
"It is remarkable that they should be closing their minds to the possibility that they are undermining the basic motive to save and invest as they blindly wage their currency wars."
Meanwhile, the United States is doing the right thing by letting the dollar ascend and staying out of the currency war, says Andreas Hoefert, chief economist at UBS Wealth Management. "The U.S. currently has little cause to be concerned,"
she writes on CNBC.com.
The idea that the United States will suffer from a drop in exports caused by the dollar's strength doesn't cut muster, Hoefert says. That's because the United States "doesn't rely on foreign trade and derives its growth first and foremost from domestic demand."
Exports account for only 13.6 percent of our GDP. The eurozone and China almost double that percentage.
"The U.S. does not need to engage in the [currency] war and fuel it further, given that exports are relatively peripheral to its growth," Hoefert says.
"The U.S.' overall attitude to the strengthening dollar seems the right one: keep cool, carry on, focus on your domestic demand, and let other countries fight the currency war."
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