Historically neutral Switzerland's foray into the global currency war ended in defeat this past week after its central bank left markets shell-shocked by abandoning the franc's exchange rate floor, analysts said.
But with major shifts in monetary policy under way, the currency war is hardly over and the front lines will move to other countries.
"The Swiss central bank was the first to throw itself into the currency war, (and) it is the first to capitulate," said Christopher Dembik, an economist at Saxo Bank.
The capitulation amounted to abandoning the Swiss franc's exchange rate floor of 1.20 francs to the euro, which the Swiss National Bank had imposed more than three years ago to stop the franc from appreciating too much against the European single currency.
But on Thursday the SNB raised the white flag and surrendered, letting the franc float.
The shock announcement was felt across the globe as the franc immediately strengthened by 30 percent against the euro. It has since settled at around parity with the euro, which is a 15 percent gain in value since the floor was removed.
The move caused plenty of collateral damage: stocks in Swiss companies heavily dependent on exports were devastated. It engulfed eastern European neighbours whose mortgage debt is denominated in the franc, and wiped out at least two international foreign exchange brokers.
Dembik said Switzerland beat a retreat on the currency battlefield before the European Central Bank at its meeting Thursday comes out "with a major weapon" --- namely a massive sovereign bond-buying programme that would flood the market with euros and raise demand for the Swiss franc, a top safe haven currency.
"The central banks talk among themselves and the Swiss know that in the case of 'quantitative easing' (QE) by the ECB the floor is no longer tenable," said Philippe Waechter, economist at Natixis AM.
For Daragh Maher, a strategist at HSBC, "by removing the floor, the SNB is no longer compelled to intervene, a tactic which had become politically contentious."
The tactic was controversial because it was costly. The SNB had to buy massive amounts of foreign currencies to contain its own money, an astronomical cost equivalent to 85 percent of the country's gross domestic product, according to Simon Ward, economist at Henderson Global Investors.
The SNB however did not totally desert the field: it dropped its key interest rate to below zero at -0.75 percent in the hope that it would discourage investing in the Swiss franc.
- Asia, emerging countries next? -
Switzerland may be a sign of currency battles to come.
"Given the general gloom over growth, the exchange rate is one of the last levers" that can be used to bolster the economic situation a country faces, said Dembik.
"The Asian countries will be on the frontline, for example, South Korea, Taiwan," he said. These countries suffer from a strong fall in the yen, which in turn benefits their Japanese competitors.
"The big emerging economies, like Brazil, will certainly also need to play with the exchange rate," he added.
The intensity of the global currency battles will depend a lot on the US Federal Reserve. The Fed has signalled a cycle of rising rates, while the ECB has been pursuing a policy exactly opposite to expansion, which has strengthened the dollar against the euro.
Until now Washington has been hands off the greenback but the Fed could, according to some experts, put the brakes on the US currency by delaying for several months its first rate rise, which the markets expect in early summer.
"The monstrous adjustment of the euro", which just on Friday fell under $1.15 for the first time since November 2003, "forces one and the other to revise their positions," said Waechter.
Some economists however don't see the world's currencies in conflict.
Agnes Benassy-Quere, a professor at the Paris School of Economics, said "it seems an exaggeration to talk about a currency war when one sees in the world floating exchange rates and the free movement of capital."
She thinks the adjustments in the exchange rates of currencies often reflect a "good functioning" of the system in which Switzerland was an anomaly with its rate floor.
The Swiss "had taken a course that's used infrequently" and "weren't playing the game of financial globalisation," she said.