The Swiss National Bank's decision to end its three-year-old ceiling on the Swiss franc merely intensified the global currency war that has percolated for more than a year, experts say.
"Clearly, the global currency war continues to rage no matter what central bankers tell us," Dean Popplewell, chief currency analyst at OANDA foreign-exchange brokerage, writes on Forbes.com.
"The SNB move is probably a sign of things to come throughout the eurozone, as other national central banks prepare for the European Central Bank’s (ECB) potential shift in monetary policy in a matter of days."
Many economists expect the ECB to mount a new quantitative easing campaign that will push the euro even lower than the 11-year nadir it touched against the dollar Friday.
Interestingly enough, the yen has appreciated against the greenback since the beginning of the year. That's because investors see the Japanese currency as a safe haven amid the turmoil sparked by falling oil prices and the SNB currency shift. Japanese authorities may not be too pleased.
The currency war doesn't have to be a problem for investors, says David Waddell,
CEO of Memphis-based wealth management firm Waddell & Associates.
"The result of competing [central bank] priorities and uncoordinated action is higher levels of investor uncertainty and marketplace volatility," he writes in The Memphis Daily News.
"Expect more of this in the coming year, as central bank statements and body language direct currency, commodity, fixed income and equity reactions."
But fear not, Waddell says.
"This does not suggest a bad year for investors, but the heavy presence of central banks makes forecasting winners and losers more difficult. Best to be widely diversified."
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