Analysts at Rabobank explained that in a speech at last month’s G20 gathering, Bank of England Governor Carney commented that “when negative rates are implemented in ways that insulate retail customers...their main effect is through the exchange rate channel”. Key Quotes: "Five central banks are currently using negative interest rates. The ECB, SNB, DNB and Riksbank have this year been joined by the BoJ. " "In the context of the currency war a successful outcome from a central bank’s decision to employ negative interest rates would be a depreciation of its currency which counters deflationary or disinflation pressure. " "Each of the five central banks employing negative interest rates has generated a different currency impact. Three of the five central banks continue to be blighted by deflation. " "Going forward, since the economies of Switzerland, Sweden and Denmark are heavily dependent on trade flows with the Eurozone, the policy decisions of the SNB, Riksbank and DNB will continue to be deeply influenced by those of the ECB. Despite widespread concerns about the economic side-effects of negative interest rates, for all five of these central banks a clear escape from this policy may only come once the global economy escapes the constrains of slow growth; an event which is proving disappointingly elusive." For more information, read our latest forex news.