Indeed, any bilateral exchange rate depends on the actions and policies of both sides. Moreover, this rate can also be influenced by the actions and policies of third countries. As a consequence, exchange rate policy is by nature international and needs to operate in a context of international cooperation.
The euro area’s exchange rate policy cannot be seen in isolation from those of the US, Japan, China, and many others. The international dimension of exchange rate policy and its implications for global economic stability came sharply into focus during the 1930s, when a series of competitive devaluations plunged the world into an economic depression.