Yuan Devaluation

Discussion in 'Forex' started by einai, Jun 20, 2010.

  1. pspr


    Ahmmm, the release of the peg will allow the Yuan to Appreciate against the Dollar not Depreciate (devaluation) as the title of this thread suggests.

    That's why other Asian currencies will probably rise vs. the dollar as this helps exports TO China.

    U.S. markets are rising because that makes U.S. products more competetive and Chinese products more expensive. U.S. bond markets may take a hit as this is an economic stimulus event, thus prospects for higher interest rates.

    I'm not a currency trader but I thought everyone who does trade currencies understood these relationships.
    #11     Jun 20, 2010
  2. I am watching the 10 year futures (ZN). Do you trade it?
    #12     Jun 20, 2010
  3. einai


    It's the Dollar that's depreciating, Sherlock.:p
    #13     Jun 20, 2010
  4. pspr


    And yet the title of your thread is, "Yuan Devaluation". If you need help with English I am sure any number of traders here would be willing to help you get the title correct, Watson. :D

    #14     Jun 20, 2010
  5. Maybe the devaluation is a negative number? Like say, instead of being devalued by 5, it's devalued by -5? Can't you guys look at it from a mathematical point of view? :D
    #15     Jun 20, 2010
  6. einai


    Right you are. Doesn't change the math, or the fact that treasuries and the dollar are tanking. When I need help with English, I will let you know. -JB
    #16     Jun 21, 2010
  7. qwert


    #17     Jun 21, 2010
  8. zdreg


    "into or out of. "
    if the situation is unclear and if you are expecting large price movement buy a straddle.
    #18     Jun 21, 2010
  9. What a lot of you guys are failing to take into considering is the fact that a lot of US companies utilize manufacturing in China in order to garner a competitive cost advantage. If that cost advantage goes away through currency rebalancing, those US COMPANIES will suffer.

    Yes, US manufactured goods will get a competitive boost as they will be priced more fairly, but in reality, how many TV's, Cell Phones, personal computers, etc are manufactured in the US anymore? Lets be realistic here.

    This should be short term good for the market as the knee jerk buyers rush in on this "good news", medium term negative as it'll result in earnings losses for any companies with significant manufacturing in China, and long term positive as it should, given enough time, push some jobs back into the US.

    Time will tell.
    #19     Jun 21, 2010
  10. zdreg


    "push some jobs in the US"

    it will push jobs in the US where transportation is an important component cost of the cost.

    more likely it will push jobs with low skills and high labor component from china into other lower cost asian countries. china will produce more technologically advanced products.

    with its debt level and out-sized and overpaid gov't work force the outlook for the US is not good.

    yes think Greece on a large scale.
    #20     Jun 21, 2010
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