For policy makers in both developed and developing countries, inflation once again came to the attention of radar (although Japan and the U.S. remains the exception). Inflation is now much higher targets (central banks) in India, Indonesia, Brazil, Canada, New Zealand, Britain and Norway. In many economies, real interest rates or negative (and somewhere, and significantly), or minimally positive. In many cases, this contributed to a marked increase in domestic demand, which in turn supported by rising prices for raw materials. Thus, in many developing economies, began a period of prolonged tightening of monetary policy (in fact, has already begun).
How will this affect the dynamics of currency markets, it remains to be seen, and it is very difficult to predict any particular conjuncture. While some central banks will take up this matter with full force, they cast doubt on recovery, while capital investment can leak out of these currencies, and this could support the dollar. It is worth remembering that investors poured money into some emerging economies in the past few years, so that if their central banks make mistakes, it can occur a considerable outflow of capital. In turn, Europe will be happy that a concentration on inflation. This will give the leaders a little rest after last year's shake-up.
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