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.
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.
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?
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
"into or out of. " if the situation is unclear and if you are expecting large price movement buy a straddle.
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.
"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.