Euro, yen: G3 laggards

In the last three quarters, two of the three largest economies in the world, the Eurozone and Japan, have not generated any domestic demand. Instead, they have had to rely entirely on net export growth to grow.

The US economy is the only G3 economy that has not been forced to rely on export-led growth over this period. US domestic demand, despite being below potential, is fuelling the economy and assisting growth in the Eurozone and Japan.

The market reacted to the news of the US running a cur