Hi All, Does anyone know if Global Currency Wars (race to the bottom – Currency devaluation) can be devastating to AUD$ ? WHY do Central Banks want to devalue a nation’s currency? The primary reason/ objective is with a devalued currency the nation will be able to - EXPORT DEFLATION to other countries, - be more economically competitive and thus promote EXPORT because of low currency value.... As expected, Mr Super Mario Draghi (Governor of the European Central Bank) just announces the following - cut its main interest rate from 0.05% to 0% - cut its bank deposit rate, from minus 0.3% to minus 0.4%. - expand its quantitative easing programme (AKA Money Printing) from €60bn to €80bn a month. Also Reserve Bank of New Zealand (RBNZ) cut it’s interest rate from 2.5% to 2.25%. New Zealand economy is similar to Australia – Commodity base. Source: New Zealand just stunned markets by cutting rates The actions of the these central banks causes their currency to devalue while the AUD$ rises. This cause a dilemma for the RBA and the next move will definitely be a rate cut by the Reserve Bank of Australia to devalue the $AUD. What do you reckon ? any kind of comments would be greatly appreciated.