In order for some currencies to depreciate, others must appreciate.

True, some currencies have risen and others have fallen, but on average almost nothing has happened.

Of course, currency appreciation should not be prevented altogether.

Efficiency dictates the use of fewer and larger currencies (and foreign investors, understandably wary of weak and volatile currencies, demand it).

Indeed, avoiding continuous competitive devaluations is more a blessing than a curse.

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Europeans are wrong to be angry with China because its currency peg to the US dollar has boosted the euro against most currencies on foreign exchange markets. On the contrary, they should view the currency peg as a valuable gift.

Europeans are wrong to be angry with China because its currency peg to the US dollar has boosted the euro against most currencies on foreign exchange markets.

Gold and foreign currency reserves are increasing, implying appreciation of the ruble.

Yet the rise in the euro, yen, and other currencies compensated for the fall in the dollar, preserving China s advantage.

Currencies fell, interest rates rose, and credit default swaps soared.

And that will require a less competitive euro higher relative to the dollar and other currencies.

The original copper coins ( as ) had a face value of one Roman pound of copper, but weighed less.

As a consequence, the euro is rising not only against the US dollar, but also against Asian currencies, whose central banks intervene in foreign exchange markets to fix their currencies value against the dollar.

One form of that diversification is to buy foreign bonds and stocks, driving up the value of those currencies.

They are resisting appreciation through foreign exchange intervention and capital controls.

Japanese intervention cannot explain the revaluation of the euro against the dollar and many other currencies.

American politicians denounced it as predatory Europeans saw it as a step on the road to competitive devaluations.

Contagion soon spread across East Asia, with the ripple effects of serial currency devaluations reaching as far as Russia and Brazil.

In many of the troubled emerging economies, however, monetary policy has shouldered the burden of controlling inflation, managing the local currency s value, and supporting growth.

Since early 2002, the dollar has fallen by one third against major currencies, and recently this decline has intensified.

Inflation has caused the face value of coins to fall below the hard currency value of the historically used metals.

The balance sheet effects on euro debts caused by the depreciation of the new national currency would thus have to be handled through an orderly and negotiated conversion of euro liabilities into the new national currencies.

While the renminbi has appreciated slightly relative to the dollar since June, the greater fall of the dollar relative to many other currencies means that the renminbi has generally also fallen relative to those currencies.

But if international currency speculators get the scent of near inevitable profits from an ongoing dollar decline in their nostrils, all Asian central banks together will not be able to keep the dollar high.

Some of the ghosts of the 1930 s have returned, too in particular, the fear of unfair trade advantages caused by competitive devaluation.

But the immediate effect was mitigated to some extent by a sharp depreciation of almost all the currencies caused by the capital outflows.

But it is clear that the fall of the renminbi against other currencies that has resulted from the Fed s policy of quantitative easing now gives the Chinese scope for more rapid appreciation of the renminbi relative to the dollar.

The dollar has declined during the past two years against not only the euro but also against most other currencies, including the Japanese yen and the renminbi.

Moreover, manipulation of official statistics highlights the problems of an economic model based on peso depreciation and the accumulation of reserves.

CAMBRIDGE The United States Federal Reserve s policy of quantitative easing is reducing the value of the dollar relative to other currencies that have floating exchange rates.

Little did the world know then, economies would collapse, currencies would become worthless, elections would be stolen, regimes would fall.

It would probably be too politically sensitive for the Fund to announce by exactly how much different currencies were overvalued and undervalued, and to declare some as seriously misaligned.

The rise in the volume of dollars is causing the value of each dollar to fall relative to these currencies, whose volume has remained constant or risen more slowly.

That is only true to the extent that we think about the price of oil in dollars, since the dollar has fallen relative to other major currencies.

Exchange of currencies

But the market forces that cause those currencies to appreciate do not work on the renminbi, because China has only very limited capital account convertibility.

Increasing capital inflows weigh heavily on import substituting and export sectors, and may even wipe them out if the appreciation is substantive and protracted.

One justification for capital controls is to prevent inflows of hot money from boosting the value of the home currency excessively, thereby undermining competitiveness.

MUNICH Because China has pegged its undervalued currency, the renminbi, to the dollar, every weakening of the dollar in the wake of America s financial crisis has also meant a weakening of the renminbi vis à vis other world currencies. But is China really to blame for the eruption of a global currency war?

But, while that implies that emerging market currencies must strengthen, disorderly appreciations would do more harm than good.

The dollar has declined during the past two years against not only the euro but also against most other currencies, including the Japanese yen and the renminbi. On a real trade weighted basis, the dollar is down about 13 relative to its value in March 2006.

Five or six years hence, the world economy faces the danger that it faced two years ago, although the fear this time is not of a sudden crash in the dollar s value, but of a sudden crash in the value of the dollar and the euro against Asian currencies.

Tom collects old coins.

Currency exchange rate