Central banks launch a new currency war

Officially, the launch of a new wave of ultra-expansionary monetary measures announced by the Federal Reserve and the European Central Bank with their latest forward guidance have the official objective of raising the inflation rate to the target level of 2.0%, since the latest surveys showed a price level still below this threshold.
The Fed will almost certainly cut the fed funds by 25 basis points at the next FOMC meeting (July 31) and many analysts believe another cut of as many points is very likely by the end of the year.
As for the European Central Bank, investors expect a cut in the deposit rate starting next September, and someone of them belives this could already occur at the next meeting (July 25), with a surprise effect. The hypothesis of resuming the Quantitative Easing, the government bond purchase program ceased at the end of last year, is also on the table.
These extraordinary measures, however, seem to hide another objective, which no central bank can admit that it wants to achieve but which in a globalized economy becomes a key driver to be able to compete successfully: the exchange rate. Having a weak currency for the Eurozone and the United States can mean billions of euros / dollars of higher exports, when, since the beginning of the trade war, these have been reduced. So far, in the announcement competition between central banks and those pursuing a more expansionary monetary policy, it was the euro that took advantage, falling to a two-month low against the dollar. Should the ECB prove to be more dovish than expected, the single currency could even fall to a two-year low, at 1.1106.
At that point, the Federal Reserve could also become more aggressive in its expansive monetary policy, taking advantage of the greater space to lower the interest rates it has compared to the ECB, triggering a war for lowering interest rates. The President of the United States, Donald Trump, would surely be happy, since he repeatedly called for the intervention of the central bank to restore competitiveness to the US economy by devaluing the dollar. However, from a global currency war it is possible, and perhaps very likely, that both macroareas could lose.