In light of the gathering currency tiff between the United States and China, Federal Treasurer Wayne Swan hinted on Thursday that global foreign exchange issues could be resolved by worldwide initiatives that will encourage fluid currency floating.

In a speech at the Future Jobs Forum held in Canberra on Thursday, Swan said that it would be prudent for the international community, especially members of the G20 Group of Nations, to support a global financial environment that encourages most countries to allow their currencies to float.

As a leading member of G20, Swan said that Australia is duty-bound to work for the eventual realisation of such a global foreign exchange set up as he suggested that "this is going to be the subject as we go forward of much more debate globally."

"It's important that all countries need market determined exchange rates to avoid depreciating their currency relative to others, including the Australian dollar," the Wall Street Journal reported Swan as saying during the forum.

Imbalances in nations' terms of trade were largely akin to currency movements, its appreciation and depreciation, and in the case of Australia, Swan admitted that the country's economy is somewhat absorbing the ill-effects of its robust terms of trade and high currency values.

While the situation benefits the consumer sector, which has enjoyed a higher purchasing power in the past quarters, Swan noted that over the long-haul, the federal government will have to implement structural adjustments across the domestic economy if only to ensure that imbalances will not go uncheck.

With market forces dictating the international currency rate, and likely manipulation is eliminated, Swan is hopeful that protectionism, which can be resorted to by some nations, will be avoided.

Swan stressed that protectionism will only hurt certain economies and on this part of the world, Australia's rural sector will end up as the most vulnerable on its negative impacts.