Market Highlights - January 2013

Currency wars continue

Exchange rates have experienced some notable swings in the last two years as policymakers attempt to maintain their country's competitive position in global markets through active intervention to drive their currencies up or down. Notable moves include the Swiss decision in 2011 to deploy a massive amount of its reserves to prevent the Swiss franc appreciating further, Brazil's deliberate devaluation of its currency, the Brazilian real, and most recently Japan's announcement of policy initiatives designed to drive the yen back down after a sustained period of appreciation. The pound fell sharply during the crisis, but since then is one of only a handful of currencies to have stayed within a relatively narrow range.