Chinese government about to unpeg its currency against USD
Others disagree with Mr Gong:
http://www.bloomberg.com/apps/news?pid=10000080&sid=aIV4yvpYlric&refer=asia
compare yuan rates with other currencies:
http://www.x-rates.com/d/CNY/table.html
http://www.bloomberg.com/apps/news?pid=10000080&sid=aIV4yvpYlric&refer=asia
compare yuan rates with other currencies:
http://www.x-rates.com/d/CNY/table.html
Trader333
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The US has wanted this for a long time. If it does happen the consequences will be huge in my view for the price of most electronic goods worldwide. The impact on other areas of Western economies would be difficult to determine although it will be interesting.
Paul
clylbw
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Many thanks indeed. 🙂
According to an economic professor at Columbia University, a Nobel Prize winner, the US government has got it wrong. The Chinese government is quite unlikely to unpeg yuan in the quick and fast manner desired by the US because that would have serious effects in rural China, they are more likely to do it in a way that suits themselves, as GJ has said. Even if they did unpeg yuan quickly and fastly, it would not help the US current accounts and trade deficit a lot, the professor argued.
Normally I am pretty weary of academic opinions, but he seemed to have raised some interesting issues. Would love to see what kind of reactions there will be.
What impressed me most was the global capital flow he described, the way enormous wealth was going around the world, always looking for the next big thing, the new profits.
Well, as long as we are ready; let the game begin. 😉
According to an economic professor at Columbia University, a Nobel Prize winner, the US government has got it wrong. The Chinese government is quite unlikely to unpeg yuan in the quick and fast manner desired by the US because that would have serious effects in rural China, they are more likely to do it in a way that suits themselves, as GJ has said. Even if they did unpeg yuan quickly and fastly, it would not help the US current accounts and trade deficit a lot, the professor argued.
Normally I am pretty weary of academic opinions, but he seemed to have raised some interesting issues. Would love to see what kind of reactions there will be.
What impressed me most was the global capital flow he described, the way enormous wealth was going around the world, always looking for the next big thing, the new profits.
Well, as long as we are ready; let the game begin. 😉
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If you want to trade the pair you can buy a USD/CNY put option and pay on US dollars. If the devaluation happens until maturity you just close the put and take the payment again on US dollars. However the last two weeks the volatilities have risen from 3,5 to 8,15 today offered. The spread of bid and offer is quite wide....
Doesn't a lot of the revaluation have to do with China's economy, being so strong they want to place some restraint on domestic inflation/imports purchasing, reduce spending by lowering the value of the yuan. Also the expectation is other 'Asian' currencies will bear the 'brunt' of revaluation rather than the US$.
TWI
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I think this will only be bullish for all the Asian currencies vs. Dollar. The reval talk is largely responsible for the nice rally in JY over the last month. China already warned US about reval not helping them and think comments made above have been floating around for a while now with more and more economists jumping on board.
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