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Surging Dollar Stirs Markets Buzz of a 1980s-Style Plaza Accord

  • Through this 1985 agreement, major nations drove currency down
  • Inflation, Fed hikes of today echo what happened back then
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WATCH: Fed Chair Jerome Powell says “no one should doubt” the central bank’s resolve to curb US inflation.Source: Bloomberg
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The dollar’s skyrocketing rise has some contemplating a rare, if not unthinkable, action: major nations agreeing to manipulate the US currency until it falls.

It has happened before -- most notably with 1985’s Plaza Accord -- which took place against a backdrop of soaring inflation, an aggressive Federal Reserve rate-hike campaign and surging dollar. In other words, a scene that looks a lot like today -- a parallel that won’t be lost on Group-of-Seven finance ministers and central bank governors as they meet this week.