There is a currency war going on—one in which the Federal Reserve is the least able to play, said David Woo, head of global interest rates and currencies research at Bank of America Merrill Lynch, on Friday.
The European Central Bank statement during a dinner last week regarding the purchase of more bonds is a strong signal it doesn't want the euro to go back over $1.15, said Woo during an interview with CNBC's "Squawk on the Street."
"You could argue that the U.S. got back on the street playing that game," explained Woo. "Now, the U.S. cannot tell others they cannot play this game."
With inflation picking up and better performance from U.S. companies, the Fed has less of a reason to get engaged in this war at the moment, said Woo.