The past half year or so has been as frenetic for currency traders as the Christmas season is for retailers. The first major crisis this year erupted in July, when Thailand's baht declined by nearly 40 percent. Now, South Korea's won is in the midst of a 30 percent-plus fall, and the contagion effect is battering an already weakened Japanese yen. The declining values of the won and the yen are in turn threatening the U.S. export boom, continued prosperity on Wall Street, and the jobs of millions of workers who could be laid off if cheap foreign imports flood the domestic marketplace. Not our fault.
Countries are very much like corporations, and they are evaluated with great scrutiny.
They have to prove their ability to be efficient if they want to participate in the global marketplace. Investors . . . In fact, international currency trading may be the ultimate free market, a totally unregulated financial system operating 24 hours a day with an apparent madness balanced by fundamental economic and strategic methodologies. If any individuals can be deemed major market movers, they are central bankers, finance ministers, and heads of state who determine national monetary policies and set interest rates affecting trillions of dollars. Commercial banks such as State Street typically play at least three roles in the international currency trading game.