Treasury Secretary Mnuchin added some clarification over his dollar comments, that over the short term USD weakness is not a "concern" and he supports "free and floating currencies
," and said a stronger currency would be reflective of the economy.
He added: "Moneychangers are dealing carefully with floating currencies
and the decisions on whether to sell or not.
The experience with floating currencies
since the early 1970s provides more than 40 years of data about changes in cross border investment flows and changes in the prices of currencies.
Indeed, the search for monetary stability in a new era of floating currencies
in the 1970s and 1980s hardly figures in his explanation of European integration.
and greater foreign exchange reserves in many countries suggest less risk today, and the readiness of central banks to provide liquidity should mean that re-runs of the last two crises are less likely.
Actually, floating currencies
are moving more towards pegs and capital controls.
Mourlon-Druol (economic and social history, the University of Glasgow) examines the historical development of the European consensus on European monetary cooperation in a world of floating currencies
On the other hand, the orderly history of debt under floating currencies
may reflect the relatively short period most countries have actually had floating currencies
to the present day, explaining in straightforward layman's terms the effects of inflation, deflation, and floating currencies
along with their effect on prices, wages, taxes, and debt.
And floating and fixed exchange-rate regimes coexist uneasily, because volatility tends to affect the floating currencies
(often the euro, and recently the Latin American currencies).
Writing in the Financial Times, Zoellick called for a "Bretton Woods II" system of floating currencies
as a successor to the Bretton Woods fixed-exchange rate regime that broke down in the early 1970s.
It's a mixture of fixed and floating currencies
that is beginning to foster not just dis-inflationary or deflationary risks in some advanced countries, but inflationary risks in emerging markets.