Part 5/7:
The interconnectedness of the global economy means that weaknesses in one region can reverberate through others. The ongoing troubles in Brazil, for instance, are linked to the fragile state of China's economy. As Brazil finds itself ensnared in a debt trap, the broader implications for global trade and financial stability are profound.
No longer can central banks and government actions unilaterally control currency markets. Instead, as underscored by historical events such as the British pound crisis in 1992, it is the traders and investors in major financial hubs that significantly influence currency values. The market now reacts more to fundamental realities than to policymaker pronouncements.