Germany takes great advantage of a vastly undervalued currency that renders its exports far cheaper than they would be otherwise.
The latest of those, which passed the Senate in October, calls for retaliation against any country that engineers an oversized surplus with an undervalued currency.
As long as there was uncertainty about the long-term value of the Swiss franc, speculators who thought the currency undervalued had an incentive to buy francs in order to profit from the appreciation, pushing the price up in the process.
If the Chinese currency is undervalued, its effect on U.S. business and job creation is negligible.
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It is -- we have said for quite some time that the currency is undervalued and that reforms need to be undertaken.
While there are still likely many more economists who believe the currency is undervalued than not, the prices of imports from China have been rising fairly consistently since 2007 (with a brief hiccup during the recession of 08-09), as this chart from the St.
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Thus if a currency seems significantly undervalued, argues the report, a central bank should raise interest rates by more than strictly necessary to keep a lid on future inflation.
Officials from the European Commission said there was nothing to add to last week's statement by eurozone finance ministers that the single currency was "markedly" undervalued, given the strong fundamentals of the region's economy.
But the Swedish currency, she says, is undervalued and is likely to appreciate as Sweden edges closer to joining the euro bloc.
The resultant weak yen, as much as the undervalued Chinese yuan, is what is distorting currency and trade flows near and far.
That, in turn, means that a currency such as Argentina's peso, which is undervalued only a tad against the dollar, is massively overvalued compared with other currencies, such as the Brazilian real and virtually all of the East Asian currencies.
Hence the Swiss franc is the most overvalued currency (by 64%), the ringgit the most undervalued (by 51%).
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However, profiting from the mispricing of risk in multiple-currency financial derivatives, or from the fact that a particular supermarket chains are undervalued, are harder for people outside the enclaves of Wall Street or the City of London to understand.
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Peterson Institute economists estimate the yuan remains about 25% undervalued against the dollar, although it has risen 7.4% against the U.S. currency since June 2010.
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