China revaluation imminent?

Discussion in 'Forex' started by mtzianos, Jul 15, 2005.

  1. When the Chinese finally revalue their currency, what if anything happens to EUR/USD?
    #21     Jul 18, 2005
  2. FredBloggs

    FredBloggs Guest

    not much (but good question)

    some organisation are now replacing the dollar as their main reserve currency with the euro. i think it will be some years until people gain the confidence in the commies before they want to hold large percentages of their wealth in yuan.

    russia is thinking of pricing its oil in euros in the future. many others are making similar moves. world wide confidence in the dollar is at a low.
    #22     Jul 18, 2005
  3. Theoretically, the effect would be a weaker dollar (particularly vs Asia) and higher interest rates in US. I think that Euro would comprise at least 20% of the "basket of currencies" and more probably like 35%.

    But... my concern is that we should be able to see some of these effects IN ANTICIPATION of the revaluation, as the insiders and big funds and China itself shift their allocations.

    Sofar the only hint I've seen is some moderate selling in US bonds since start of June, despite "bullish" funnymental "newsnoise" (you know, 0% CPI etc), every rally finds sellers.

    And the one-day-wonder of most currencies rallying 1.5% against USD last week, but that rally had almost reversed itself by last Friday.

    I would also expect that Bank of Japan would have tried to cover some of the $320bn of counterfeit money it has printed in 2003-2004 to buy USD/JPY, before China moved.
    #23     Jul 18, 2005
  4. what type of paranoid chicken little talk is that. are you sure you are a trader?

    just cuz we aren't #1 doesnt mean we are last place and die like a starving homeless person. britain aint #1 anymore and they seem to be doing just fine. same with spain, france and germany.

    the USA is the #1 economic and military power in the world but we probably aren't even in the top 5 for standard of living. how does that equate?
    #24     Jul 18, 2005
  5. TGregg


    This is an easy question if you are well grounded in philosophy. It boils down to:

    "Is China relatively free of corruption and actually turning towards capitalism? Or do the Powers That Be continue their strong hold? What has happened in the past? Is there reason to believe it won't happen again?"

    It's not Rocket Science. But there are plenty who observe poorly, so there is disagreement and even hatred.
    #25     Jul 18, 2005
  6. USDJPY hits fresh high for the year

    The Japanese yen reached a fresh low against the US dollar this morning as stop-loss orders were triggered pushing USDJPY north of 112.70 – its highest level since May 2004. Yen bulls were looking for some indication from Chinese officials regarding the revaluation of the yuan, with Japanese Finance Minister Tanigaki calling for China to take “bold action.” However, a statement from the People’s Bank of China released today, following a two-day meeting on monetary policy for the second half of the year, vowed to keep both monetary policy and the yuan steady. Any reform in the current exchange rate regime would occur “gradually” the PBoC said. This appears to squelch current rumors that China would revalue ahead of Premier Hu’s visit to the US.

    A sustained break of 113, could see USDJPY test resistance at 113.33(May 25, 2004 high), followed by 113.88 (May 20, 2004 high). Support increases to 112 and is followed up by 111.80 and 111.50.
    #26     Jul 19, 2005
    #27     Jul 20, 2005
  8. the pressure will be on them to reval -- it's clearly being held down. they'll probably respond with something like, "further pressure to revalue our currency will be met with nuclear weapons fire" or some such saber rattling.
    #28     Jul 20, 2005