The crisis gripping Europe reflects a much larger problem: The world’s policy makers have fundamentally opposing views of how to manage their currencies and economies. Unfortunately, there’s no happy solution.
The largest emerging markets, whose economies grew more than four-fold in the past decade, are making losers out of everyone from central bankers to Procter & Gamble Co. as their currencies post the biggest declines since at least 1998.
Argentina’s dollar-denominated debt dropped on speculation the government’s offer to pay defaulted debtholders on similar terms as past restructurings will spur a U.S. court to order the nation to pay in full.
Europe’s worsening debt crisis is intensifying pressure on policy makers to widen a bailout package beyond Greece after a cut in the nation’s rating to junk drove up borrowing costs from Italy to Portugal and Ireland.
The euro fell to the lowest level in five weeks against the dollar after European Central Bank council member Axel Weber said the region’s economy may need help from the central bank through the end of the year.