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Currency wars are working their way back into the investor mindset as the Bank of Japan and European Central Bank have entered a race to the bottom.

On Thursday, the euro hit a 26-month low against a basket of currencies as ECB President Mario Draghi said he would take more policy action if current efforts are not enough to prop up the struggling eurozone economy.

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His declaration came a week after the Bank of Japan surprised markets with a fresh new round of easing. But analysts note that the yen is still weak compared to the euro, so Mr. Draghi could be forced to take further action.

We are in a full-blown currency war and the ECB will feel under pressure to take part in that

“We are in a full-blown currency war and the ECB will feel under pressure to take part in that, but it’s too soon now,” said Nick Beecroft, non-executive chairman and senior markets consultant at Saxo Capital.

The term currency war originated in 2010, when Brazilian finance minister Guido Mantega accused western governments of competitively devaluing their currencies to try to boost exports and their flagging economies.