IMF sees dangers from trade tensions, overvalued dollar

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IMF sees dangers from trade tensions, overvalued dollar
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The International Monetary Fund on Wednesday said that the U.S. dollar was overv...

WASHINGTON - The International Monetary Fund on Wednesday said that the U.S. dollar was overvalued by 6% to 12%, based on near-term economic fundamentals, while the euro, Japan’s yen and China’s yuan were seen as broadly in line with fundamentals.

Trump has railed against European and Chinese policies that lead to what he calls devaluation of the euro and other currencies against the dollar. The Fund - which has warned that the U.S.-China trade war could cost the global economy about $455 billion next year - said recent trade policy actions were weighing on global trade flows, eroding confidence, and disrupting investment. But they had done nothing to reverse external imbalances thus far.

“An intensification of trade tensions or a disorderly Brexit outcome - with further repercussions for global growth and risk aversion - could .... affect other economies that are highly dependent on foreign demand and external financing,” it said.

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