Geithner to Japan and Switzerland: Eat Deflation?
Bruce Krasting submits:
I wrote a few days ago that I thought we were seeing evidence of growing instability in the FX markets. The problem is with the “Strongs”. The Yen and the CHF are both at near records against the dollar and they are at records versus the Euro. These records are a cash machine for the FX crowd. The CBs know it and they do not like it.
IMHO the only thing that is going to stop the cycle of the Strongs getting stronger is coordinated intervention where the NY Fed took an active and visible role. We are not going to get that. I think that is an important conclusion. If that is not the case then the door is open for continued (irregular) strength of the strong pair. Consider this from Bloomberg:
