IMF: USD real effective exchange rate overvalued by 10-20%
|"The International Monetary Fund said that the U.S. dollar was overvalued by 10 percent to 20 percent, based on U.S. near-term economic fundamentals," Reuters reported on Friday.
Key quotes (via Reuters):
- Euro is broadly in line with eurozone fundamentals as a whole, ranging from undervaluation of 5 pct to overvaluation of 3 pct,
- For Germany, euro real effective exchange rate is overvalued by 10-20 pct compared to German fundamentals
- China's yuan is broadly in line with fundamentals, but current account surplus still too large
- Japan's yen is broadly in line with fundamentals due to appreciation in 2016
- British pound valuation is 0-15 pct above level consistent with fundamentals, uncertainty over Brexit is high
- Mexican peso undervalued by 5-15 pct under scenario where protectionism risks don't fully materialize
- South Korean won undervalued by 5-15 pct vs fundamentals, current account surplus among highest of economies assessed
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