FX wars vs. currency wars / USD vs. EUR vs. RMB vs. …

The USD is by far the most important international currency, although declining in recent years, especially as regard central banks’ FX reserves. New currencies have emerged (of which the RMB), central banks diversify their portfolios (especially in Asia), while some “old” currencies gain ground (the JPY and gold, to some extent). Moreover, even if two contenders exist at present (the euro and the RMB), the USD is the only currency to be considered as an international currency as regard all its characteristics: reserve currency, invoicing currency, vehicle currency, reference currency … It is the only one to be worldwide accepted, and the US, through structural (recurrent) fiscal and current account deficits (and through the balance sheet of the Fed), never stopped feeding the global liquidity market (a major difference with Germany, for example). However, the international status of the USD might diminish further in the long term depending on 6 conditions...

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