Currency war: Who will be the casualties?

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Are we in a currency war?

Central banks are in combat mode.

On the front lines: Europe, Denmark, Canada, Switzerland, Peru and India. Each of their central banks has taken unprecedented and dramatic action to ease policy and weaken their currencies in the past few days.

Central bankers may say they're ramping up the fight against worryingly low inflation, exacerbated by the dramatic plunge in oil prices. But the immediate, and perhaps most effective, impact of the easier monetary policy moves is being felt in the foreign exchange market.

"We are in currency wars," Goldman Sachs President and COO Gary Cohn told a panel discussion at the World Economic Forum in Davos, Switzerland. "The prevailing view is that the easy way to stimulate economic growth is to have a low currency."