Currency Values Are Not Determined by the Market When Central Banks Buy Currencies

A NYT piece reported on concerns by the French government and others over the rising value of the euro. They were concerned that a higher valued euro would make French and other euro zone goods less competitive in world markets. In response the piece included two statements that are at best misleading.

It presented the views of Jens Weidmann, the head of Germany's central bank, who said, "warned that an exchange rate policy aimed at weakening the euro would 'in the end result in higher inflat...