Yuan Advances Past 7.5 for First Time Since End of Dollar Link

Discussion in 'Wall St. News' started by ASusilovic, Oct 24, 2007.

  1. China's yuan posted its biggest gain in a month, rising beyond 7.5 to the dollar, driven by a widening trade surplus and inflows of foreign investment.

    The currency rose to the highest since the central bank ended a fixed exchange rate in July 2005, after the Group of Seven nations called for a faster pace of appreciation. Traders are betting it will break 7 per dollar by the end of next year, non-deliverable forward contracts show.

    China's currency has advanced 10.5 percent since a link to the dollar was abandoned, gains that European and U.S. officials say are insufficient to reduce trade imbalances between the nations and to protect jobs. Jim Rogers, chairman of Beeland Interests Inc. and a former partner of George Soros, said yesterday the yuan may quadruple in the next decade.

    The yuan is ``the best currency to buy right now,'' Rogers told investors in Amsterdam, adding that he is shifting all his assets out of the dollar and into yuan. China is ``going to be the most important country in the 21st century.''

    The currency climbed 0.15 percent to 7.4934 per dollar as of 2:56 p.m. in Shanghai, according to data compiled by Bloomberg. Forward contracts show the yuan will reach an implied rate of 7.0190 in 12 months, a gain of 6.7 percent from the spot rate, and 6.96 by the end of 2008.

    The government should revalue the yuan by as much as 20 percent, according to a report circulated inside the National Development and Reform Commission, Market News International said. To curb market expectations of continued appreciation, China should make a one-time revaluation and then maintain ``relative stability,'' Market News cited the report as saying.

    http://www.bloomberg.com/apps/news?pid=20601087&sid=aPpr_p5_sfcM&refer=home
     
  2. Ironically, Buffett said earlier US$ is the best currency right now.
     
  3. Do you have the link?
     
  4. Daal

    Daal

    where
     
  5. What a joke...

    Its moved 10.5% in 3 years and we have a $22 BILLION per month trade deficit.

    That's enough EXTRA dollars per month to buy most of the world's gold production each month
     
  6. yep.. but gold is -relatively- useless (next to oil, food, etc). thats why its not already at 1500.
     
  7. Things will eventually correct. 3 to 1 would hopefully get the trade imbalance to contract. If its done al at once it will be catastrophic I'd guess, so it needs to move at a rate of 10 or 15% per year till the deficit goes away.

    Gold just *IS* money. Its not priced in money. Its the paper that is a commodity.

    What we use for money is just paper debt that can never possibly be repaid enhanced with a bit of "pixie dust" from the Fed.