Crunching the currency

In my Stuff blog, I take a look at the currency, with the record highs against the US and UK. I concluded:

Politically the currency can have a big impact on the economy and the popularity of the government. But it is not something governments can do a lot about in the short term, unless they want to risk billions of dollars in currency speculation. Long-term policies that lead to better productivity can lead to a stronger currency, but in a way which doesn’t harm the export sector so much, as the increased productivity gives them competitive advantage. That is how you get a win-win.