Why currency war scenario is ‘exaggerated'

Central banks are pursuing domestic priorities and are not engaged in competitive devaluation, a senior Swiss economist told delegates at the recent FX Invest conference.

Jan Amrit Poser, chief economist and head of research at Bank Sarasin, said the heightened discussion of a currency war in recent weeks has been exaggerated, although he understands the concerns. "Of course, everybody is right to worry about a currency war, because it can happen, and we know that it can lead to a trade war and maybe even to a real war. "But what we are seeing currently is that central banks are targeting domestic agendas. In Japan, for example, I think they are completely right to tackle deflation because that is probably the worst state the economy can be in, and the...