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As a result, freely floating currencies are comparatively rare.The most recent U.S. intervention in foreign-exchange markets (which has been rare in general) to support a weak dollar dates back to 1992-95 .In the first half of the 1980s, following the Federal Reserve's record interest-rate hikes, the dollar appreciated by almost 45 percent against other major currencies.At New York City's Plaza Hotel on Sept. 22, 1985, U.S. officials and their counterparts from the world's leading economies agreed to take concerted action to halt and reverse the dollar's appreciation.It was an accord precisely because it involved international policy coordination among the major players, whose public statements were coupled with organized market intervention (selling U.S. dollars).The dollar has appreciated by more than 35 percent against a basket of currencies since its low point in July 2011 .Perhaps financial markets will begin to perceive the dollar as currently overvalued and retrench.Apart from the significant cumulative appreciation of the U.S. dollar, there are scant similarities between the current environment and 1985 . If the strong dollar prompts intervention in currency markets in 2017, the most likely scenario is one in which the U.S. intervenes alone.
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