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The coordination channel has recently been established as an additional means by which foreign exchange market intervention may be effective. It is conjectured that strong and persistent misalignments of the exchange rate are caused by a coordination failure among fundamentals-based traders. In...
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constitute long-term appreciation expectations on yuan and yen, which have made China and Japan vulnerable to U.S. interest rate … cuts and appreciation expectation shocks. For both China and Japan - at different points of time - self-fulfilling runs …
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