Today, Federal Reserve Chairman Ben Bernanke made his most aggressive speech to date against Chinese currency manipulation, targeting countries that artificially debase their currencies for competitive advantage.
But was he right to do so?
A chart from Societe Generale suggests the current rate of appreciation for Asian currencies (dollar-Asia index) is higher than it has been over the past decade. Notably, those periods of appreciation often ended with economic crisis.
It is possible this basket of Asian currencies may just show steep appreciation in the Korean won, Thai baht, and Indian rupee, and not the yuan. But the steepness of the appreciation would suggest otherwise.
From Societe Generale:
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