"We are in a currency war, but no one has admitted," says a strategist

Central banks are currently involved in a secret currency war that is causing stagnation in foreign exchange markets, according to Thanos Vamvakidis, Global Head of G-10 Foreign Exchange Strategy at Bank of America Merrill Lynch.

The easing of monetary policy is a key theme for central bankers up to now in 2019: the US Federal Reserve, the Bank of England and the European Central Bank (ECB) have all announced accommodative positions and fueled speculation in favor of an increased easing of monetary policy.

Wall Street badysts began to speculate on President Donald Trump's intervention to weaken the national currency, following a series of comments by the US president.

Trump recently complained that China and Europe have embarked on political measures to reduce the price of their currency in order to be more competitive with US trade, and has repeatedly criticized the Fed for its lack reducing interest rates.

Vamvakidis suggested that with most of the major central banks, currencies could enter a stalemate.

"They can not affect the cost of borrowing because interest rates are historically low.The only way for them to ease their monetary conditions is therefore to weaken their currency. ", he said Tuesday at" Squawk Box Europe ".

"However, there is balance, because when everyone does, the currencies do not really move, you do not get any profit, because you end up wasting very limited ammunition as part of the monetary policy with little result, so, in a way, we are in a monetary war, although no one has admitted it, "he added.

Vamvakidis argued that in theory, although governments can intervene when currencies are overvalued, the way they currently unfold produces more negative side effects.

"Everyone is trying to change their currencies, but everyone is trying at the same time and in the end nobody benefits," he said. "The collateral damage of all this is that the coordination of international policies suffers."

The United States has long been paying lip service to the "strong dollar policy," but badysts have noted the Trump administration's apparent hesitation on the commitment.

Vamvakidis said that if he disagreed with Trump's direct targeting of the currency, the strong dollar policy should be abandoned.

"That makes no sense, no other country has it, it was introduced in the mid-90s, it's symbolic, the United States has done nothing for the support and, in fact, this is justified in a very strange way, "he said.

"The argument is that the US economy is strong and so the dollar should be strong, and it could just as easily be replaced by a strong growth policy."