China says: don't bet against yuan, we're defending it

Discussion in 'Economics' started by nooby_mcnoob, Jun 15, 2019.

  1. Well, we know how well that's gone with jolly old England and CHF.

    So, what are your bets? I want to put in something. Probably shorting FXI when it pops, but that's easy. I'm thinking something bigger.
  2. Remember when the yuan was "too weak" and Trumpy was pissn' & moan'n about it?
  3. Tariffs will put a nice floor on it, but I can see yuan depreciating just about the amount required to make tariffs ineffective. Interesting.
  4. dozu888


    tricky trade... the real exchange rate is like 1:20... but...always tricky when something is not driven by supply demand.
    Stockolio likes this.
  5. Plus they have decent reserves (right? right????)
  6. dozu888


    yeah right... and the outflow control is very tight right now.
  7. So I guess there is still a long time before we have a pound/Soros situation.
    murray t turtle likes this.
  8. China is going to devalue their currency to offset the tariff. The question is how are they going to control the devaluation to maintain stability of the Yuan. Are they going to raise interest rate? Are they just going to use their foreign reserve? How big is this reserve? How will they maintain this reserve? What if Trump slap an additional tariff on them after he blocked off the Iranian oil from going to China?

    Shit doesn't look good for China. The only thing they got going to propaganda, which the rest of the world can see through.

    It is not going to be a pound/Soros situation for China. It's going to be a Chinazuela situation!
    murray t turtle likes this.
  9. ironchef


    Yes, depreciated 10% to take care of the 10% tariff. Probably will depreciate more now that the tariff is 25%.

  10. ironchef


    I don't think it will be that bad. Of course I am just an amateur retail trader, what do I know?
    #10     Jun 15, 2019
    Pension_Admin likes this.