Why Is the U.S. Treasury Intervening in Currency Markets and What Does It Mean for Investors?
The U.S. Treasury has been buying yen to prop up its value relative to other world currencies.
Overview
Unlike many nations, the U.S. government has historically tried to avoid intervening in currency markets.
The dollar floats freely on global exchanges, and the U.S. Treasury Department generally likes to keep it that way. Occasional utterances by Treasury Secretaries, beginning with Robert Rubin during the Clinton Administration, that the U.S. has a "strong dollar policy" are purely rhetorical, meaning the rhetoric is the entire policy.
Details
But once in a while, Uncle Sam deems it necessary to buy or sell other nations' currencies when their exchange rates reach extreme and unhealthy levels. That's exactly what happened in recent days. And it has consequences for U.S. investors, too.
Source
Originally published at www.fool.com.