by Michael Collins, Investment Commentator at Fidelity.
“The Plaza Accord still stands as the best-known multi-national effort to manipulate foreign-exchange markets. Perhaps an agreement like this is needed today because the US dollar is soaring again. In fact, the yen is weaker now than it was in 1985 on a real-effective (inflation adjusted) trade-weighted basis – falling to 74.81 on this measure in September this year, its lowest since 1982.[2] But there’s no sign of a new pact, even amid talk of so-called currency wars. Investors can thus expect the greenback to add to its 6% surge since July that has seen it surpass four-year highs when judged on the Federal Reserve’s measure of the US dollar’s strength against widely traded currencies.”
