A regular feature back in 2010 when we had our first taste of global currency warfare as Brazil's finance minister accurately summarized when he said "a currency war has broken out" (and yes: currency war existed then, and especially in the 1930s which led to the Great Depression, long before the recent eponymous book came out desperate to take credit for this simplistic concept) were the global FX heatmaps which showed how any given currency is doing on any given day. Since currency warfare is now back and more violent than at any time in the past 80 years, it only makes sense to bring back a long-time reader favorite: the currency warfare heatmaps which show who, on any given day, is winning and losing, the global race to debase and in the process beggar all globalized and SWIFT-interlinked neighbors. But don't forget: in a relativistic fiat world, nobody can actually win the global race to debase. Well, not nobody: gold (and other precious metals) can, assuming it is not confiscated as it was the last time the US ended the global currency war with a 50%+ devaluation of the USD relative to gold... and promptly confiscated all gold.
Legend for the charts below for any given currency:
- red indicates a given country/insolvent monetary union is winning the FX debasement war relative to any given currency;
- green indicates it is losing it.
Below are the currency warfare charts for today:
USD - doing solidly well, trouncing Brazil, South Africa, India, Canada and Russia showing Europe who is boss. The only clear winners against King Dollar: tiny Iceland.
EUR - not too shabby either, mauling Brazil, South Africa and landlocked Switzerland, but retreating against the US, China, Argentina, and of course Iceland.
JPY - today's clear winner, except again for Iceland which just like in Risk, remains a key strategic hotspot for anyone hell bent on destroying their currency.
GBP - the biggest loser today, is this once powerful colonial nation, whose currency has appreciated against most of the world.
But one day is tactics. One year is strategy. Here is what the fallout of currency warfare over the past year looks like. The undisputed winner of the past year's currency nuke out is...
JPY - That's right: the Japanese Yen is the winner by a mile from all the coordinated currency intervention in the past year: not one country has managed to destroy its currency nearly by as much. The only problem now is if China will actually agree to import any of Japan's products and services any time soon, as not even a JPY at 0.00 will help much unless this key export market remains shut over that whole island fiasco.
Since every clear winner needs a clear loser, here it is:
EUR - the European currency has soared in the past year, and in the process has made life for both its export industry and its current account next to impossible. One can only hope the ECB can reponzify as much capital into the troubled nations to offset the increasing trade isolation of the insolvent continent, which will soon have to figure out a way to boost German exports or else.
Curiously, the USD is doing only so-so despite the fact that it has been long priced in that Bernanke will print some $1+ trillion in 2013, and another $1 trillion in 2014, and so on.
As for Cable, well, Mark Carney has yet to introduce the BOE to just how Goldman suicides your currency: