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Most forecasters assume a further appreciation against the dollar.
Real appreciation against deficit countries is required of surplus countries.
First among these, some think, is the real's recent appreciation against the dollar (see chart).
Much of that is a function of the yen's appreciation against the dollar.
The price increases, he said, had been partly offset by the euro's appreciation against the dollar.
The case was stronger in late 2008, when global trade collapsed and China was looking to prevent a total industrial meltdown (and when appreciation against the dollar would have meant extremely rapid appreciation against most other currencies).
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But these days that appreciation bumps up against increased health consciousness and greater culinary sophistication.
Overseas demand was reined in mainly by the ongoing lethargy of the eurozone and the appreciation of sterling against the euro".
And pushing against appreciation enables the accumulation of foreign-exchange reserves, which can then be deployed to ease depreciation when market sentiment shifts.Of course, and as the IMF points out, a free floating regime has been associated with the lowest probability of crisis over the past generation.
That has been influenced by the weakness in Eurozone markets and, more recently, by the appreciation of sterling against the euro.
Here, the ARCH parameter denoted by β measures the reaction of conditional volatility to market shocks (i.e., it measures the variance response in exchange rate returns against appreciation or depreciation).
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com