Discussion in 'Trading' started by yenzen, May 11, 2005.
Dont look now, but a melt up is in progress.
DAX went from about flat to up 15 in a minute. ES has rallied 5 handles in about 15 minutes as well
any news on the run up
Something about Chinese currency decisions?
pump and dump
Yen Gains; People's Daily Says China to Revalue Yuan Next Week
May 11 (Bloomberg) -- The yen rose against the dollar and the euro after the People's Daily newspaper said that China will revalue its currency next week after keeping it pegged for the past decade.
China will make the change after meeting U.S. officials, the paper said in its English-language online edition, without saying where it got the information. A stronger yuan may reduce the competitiveness of China's exports compared with Japan.
``People are taking this news as the revaluation and you're seeing the yen and other Asian currencies strengthening,'' said Ian Stannard, a currency strategist in London at BNP Paribas SA.
The yen rose to 105.09 per dollar at 9:41 a.m. in London, from 105.56 late yesterday in New York, according to electronic currency-dealing system EBS. It advanced to 135.41 per euro, from 135.96. The dollar was at $1.2888 per euro, from $1.2881.
A decision to allow the yuan to gain may make Asian governments, including Japan's, more tolerant of stronger currencies. Japan is unlikely to sell yen to quash a rally, said Jim O'Neill, head of global economic research at Goldman Sachs Group Inc. in London.
``On a Chinese move, the yen would go through 100,'' O'Neill said in a May 6 interview. ``The yen would strengthen very quickly.''
Japanese Finance Minister Sadakazu Tanigaki is among officials from the Group of Seven industrialized nations who urged China to relax the peg of 8.3 yuan per dollar. Federal Reserve Chairman Alan Greenspan told the Senate Budget Committee on April 21 the peg is beginning to work ``to the detriment of the Chinese economy.''
Speculation about a change in China's peg climbed on April 29, when the yuan briefly rose to 8.2700 against the dollar, the most since the exchange rate was fixed a decade ago. A state- sponsored newspaper in China said the same day that the government may let the yuan trade more freely at any time. China has kept the yuan at about 8.3 per dollar since 1995.
The yen has rallied from a six-month low of 108.89 on April 5, on speculation China would alter its currency policy. The yen has strengthened even as reports indicate Japan's economy is struggling to expand. Retail sales, household spending and industrial production fell in March, according to government figures.
``The significance of everything has waned relative to the situation in China,'' said Steve Barrow, a currency strategist at Bear Stearns Cos. in London. ``The bias is most definitely for a lower dollar.'' He spoke in an interview on May 6.
Japan's currency may rally to 99 versus the dollar at year- end, according to the median forecast of 49 analysts, traders and investors surveyed by Bloomberg News between March 29 and April 6. The estimates were based partly on expectations the yuan would appreciate.
``If China moves, they can all basically move,'' said Bankim Chadha, head of macro currency research in New York at Deutsche Bank AG, the biggest foreign-exchange trader. ``It becomes a little harder for Japan'' to stem a rally in the yen, and the central bank may let it appreciate to 95 per dollar, he said.
Its a Yuan revaluation moron, see the bandits knew it!
can someome explain how the revaluation will effect US equities?
That is the million dollar question. I would like to know myself. Most of the profits from tech and manuf and retail are due to the huge imbalance in the currencies, i wonder how the reval. will impact margins. Other than that my guess is they will say its great for the US economy, but in reality everything will be the same is my guess.
Chinese govt has denied and forced removal of the article from the online newspaper that broke the story.
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