Can anyone explain why euro will drop against dollar should RMB get revaluation?

Discussion in 'Forex Trading' started by LucasX, Mar 16, 2010.

  1. LucasX

    LucasX

    I am wondering what's the possible reason for that argument.
     
  2. Surdo

    Surdo

    Are you sure you are on the correct website?

    :D
     
  3. LucasX

    LucasX

    Seriously man, I am looking for the possible explanation.
     
  4. perhaps because the yuan is keeping global rates low - euro will get damaged in an environment where rates go up...

    Just a 3 second thought, id research it carefully.
     
  5. LucasX

    LucasX

    Thx man. I like your simple argument but there is a missing unspoken assumption you made - the appreciation yuan will cause rate go up(my guess ur talking about long term USG rate). Why is that? Can you explain further or correct me if my understanding your argument is wrong.

    Btw I think there is another way to explain. Think it as a teeter-totter game. On one side you got the heavy pressed RMB/USD. On the other side you got up-in-the-air EUR/USD. Once the pressure released from the heavy side, balance will be restored. 2 cents.