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With the world currency war raging, the U.S. is searching for allies, and is now focused on enlisting Brazil as its ally, according to the Financial Times.Brazil has been the biggest loser in the currency war thus far, facing rising inflation and the potential for problems in the country’s banking sector as a result of its policies.
U.S. Treasury Secretary Timothy Geithner is appealing to Brazil to side with the U.S., as it experiences a flood of cheap Chinese goods damaging its own manufacturing sector.
Brazil may outline its agreement with the U.S. over the yuan in a statement as early as March, according to the FT.
There were rumours that Brazil was going to stand against China at the start of the year. Now it seems they’ll form an alliance with the U.S. to do so.