Currency Wars, Devaluation Infographic - Saxo Capital Markets UK

Who Will Win the Race to the Bottom in the Latest Currency War?

An extreme case of quantitative easing across the global financial market has led central banks to smash their currencies in order to encourage growth. As major banks all follow the same path down the hill and continue their currency devaluation, which country will be first to the bottom? And who are the current currency winners in terms of real GDP%? Find out with the latest infographic from Saxo Markets.

So, of the eight major currencies, which is winning the currency war? Follow the race downhill in this infographic as the eight country competitors sprint to devalue their respective currencies. Australia, Switzerland and Canada are all lagging at the back as they show a positive percentage increase in currency value since 2010, whilst the UK, USA, South Africa, EU and Japan are racing to the bottom with increasing negative percentage changes. It looks like the Japanese Yen (JPY) will continue its lead downhill, but could the decreasing Euro (EUR) surpass it? However, even if the first to the bottom is the winner of this race, it seems they won’t win the currency war.
In terms of economic output (measured by GDP percentage) for each country, Saxo’s infographic shows how the competitive devaluation and unilateral currency interventions do not necessarily pay off. Although Australia’s GDP% has dropped slightly, it still stays on top, and the Euro area remains bottom of the pack even after constant currency value drops.
Do you think if these currencies continue to push downwards it could help them win the currency war? Have your say and join in the conversation with Saxo on Twitter.

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