Yellen Faces ‘Currency War’ Redux as Strong Dollar Ditched
- Dollar’s depreciation has spurred others to intervene
- Yellen pledges to look at moves to gain ‘unfair’ advantage
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Treasury Secretary Janet Yellen faces one more headache on an agenda packed with everything from Covid-19 relief to addressing inequality and overhauling tax policy: tensions over foreign-exchange intervention.
The dollar has tumbled 13.1% from its high last March, thanks in part to historic moves by the Federal Reserve to pump liquidity into the financial system and pull down American borrowing costs. While policy makers abroad at first benefited from U.S. action to stave off a global credit crunch, the appreciation of their currencies more recently threatens to curtail their own recoveries. So from Europe to Thailand to Chile, officials have laid out plans for sustained intervention.