Today I'm looking at the korean won vs the yen. Jap has decided to smash their yen thus making the won more expensive. The $ printing still continues making the won more expensive than the $. So the won is more expensive than the yen and $. What does that do to the koreans export revenues? Samsung, LG, cars etc - reduced export sales. When S.korea reports Q1 econ stats I think the CB will be given the green light to 'make exports competitive'.
Currency wars will escalate this year as US ensures it exports inflation globally while net exporters fight back by printing their ccys as well. China is the focus here on inflation. Will eurozone agree to have an expensive euro with the recession & limping PIIGS? Nop. Will UK want an expensive pound while facing triple dip recession? Nop. Will swiss want an expensive franc? Nop. Most of the G20 CBs are squaring each other as the currency war escalates.
For fx traders it's a dreamland casino come true
At some point gold, silver, platinum, palladium, rare earth metals etc will spike in quick succession in a 'shock & awe' event... That catalyst is what's missing in the kitchen at the moment.
As a net exporter in a limping global econ a weak ccy is what you want to safeguard your revenues else you slump your econ.
The casino is about to get very interesting from March starting with that fiscal cliff thing. The eurozone with sovereign debt comes back to focus and the squaring gets squared...
$15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!