NO CURRENCY wants to be the “strong” currency against the dollar as they all think they can export their way out of a recession.
A weak dollar is ALL of their problems...
Most world currency is falling against gold, but not against one another. If anything, relative value of dollar could be slightly rising. Debasing of currencies occurs across the board. But if dollar continues to fall against gold or other commodities, the question comes how long other currencies could match dollar’s fall at the risk of high inflation.
Agreed, but aren't exports the best way to get out of any financial situation? It wasn't FDR's ridiculous government spending that got the US out of the depression, it was becoming manufacturer to the world just prior to WWII.
The Yuan doesn't just "match the dollar", it's pegged to the dollar. I haven't seen it move at all. The Japanese Yen got down to 88 Yen/US$, though it has weakened slightly to around 91 this morning.
I don't see any reason why the Chinese would want to change their policy at the moment. A weak Yuan is good for them. Japan has got to be in a world of pain between the strong Yen and the weak US market.
A weak dollar is ALL of their problems...
Not quite all, but close enough. A strong local currency versus a weak US dollar makes it more expensive to export to the US. It also makes imports from the US cheaper, except that we really don't make anything any more except war toys.