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Mark Gilbert

Fragile Currency-War Truce May Fracture

A currency free-for-all threatens the global economic recovery.
Guided by voices.

Guided by voices.

Photographer: Millard Smith/The Denver Post via Getty Images

The foreign exchange market is notorious for overshooting. A currency that starts moving in a particular direction as economic fundamentals change will often end up at a rate that can’t be justified by the data. So trying to nudge the matrix of currency values is akin to policy makers attempting to steer a Ouija board pointer -- which is exactly what seems to have happened since their February Group of 20 meeting in Shanghai produced a tacit truce in the currency war.

QuickTake Currency Wars