Riot police stand outside the European Central Bank's headquarters in Frankfurt. REUTERS/Kai Pfaffenbach
Liam Halligan, The Telegraph: Global currency wars are threatening a Lehman-style crisis
Global currency markets made front-page headlines last week as the euro plunged towards parity with a surging dollar and the pound similarly soared against the single currency.
But why is the dollar so buoyant and the euro spiralling downward? And should you lock in the strong pound by buying your summer holiday money now?
You may, quite reasonably, think that economic fundamentals, such as GDP growth and cross-border trade flows, still drive exchange rates.
WNU Editor: In my life I have learned one golden rule when it comes to government manipulation of the economy .... in the end free markets will rule. Today's global currency wars are just the latest manifestation of government control and manipulation of markets .... that in the end will also fail.The question is when .... and I expect it will happen when we least expect it.
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