The entire currency market is reeling from the depression which rocked the eurozone. It is currently a challenge of relativity – which country can withstand this crisis and emerge stronger in the economic sense, and as a result have a stronger currency.
China, in particular, has emerged the strong winner. In recent months, China not only gave a fresh display of its economic and political muscle, but also exhibited the skills and sophistication on emerging from the crisis.
For example, China’s State Administration of Foreign Exchange clarified in May 2010 that Europe will continue as the key investment markets for China’s foreign-exchange reserves of nearly $2.5 trillion. This reserve is unrivaled even by the United States, and shows the long term vision of the Chinese in getting value for their investment and equally importantly, the confidence that Europe will be able to recover from the Eurozone crisis.
Currently, 1 Chinese Yuan (or Renminbi) trades at 0.1183 Euro, or 1 Euro = 8.453 Renminbi.
Hedge funds in particular, pays attention to the announcement by the Chinese government and would Read the rest of this entry »
May 28th, 2010 in
Chinese Yuan (RMB),
Euro (EUR) | tags:
chinese yuan,
euro,
eurozone,
foreign exchange reserves,
investment decision,
kuwait investment authority,
political muscle,
renminbi,
state administration of foreign exchange |
No Comments
For the longest time, the Chinese Renminbi had been pegged strongly against the US Dollar. Currently, the Chinese Renminbi trades at 1 US Dollar = 6.83 Renminbi, or 1 Euro = 9.21 Renminbi.
There had been much talk about the appreciation of the Chinese Yuan and news had certainly been heating up. Just on 16th Apr 2010, Chines President President Hu Jintao mentioned that China is on course to gradually introduce a managed, floating exchange-rate system. This to address pressure mounted on Beijing to let the yuan strengthen and calls by both America and Euro to stem a trade deficit against the China.
Domestically, the strengthening of the Yuan will however hurt export. A stronger yuan will squeeze the already thin profit margin of most Chinese export companies and make the products more expensive and therefore less competitive. Most economist predict that a 1 percent increase in the Chinese Yuan will lead to a corresponding decrease of up to 10% in Chinese exports Read the rest of this entry »
The rich oligarchy in Kyrgyzstan are not the only ones worried about the change in government, where former President Kurmanbek Bakiyev was toppled in Apr 2010.
Forex traders were very mindful and wary too, as the currency of Kyrgyzstan Som (KGS) (Kyrgyz: сом, sometimes transliterated as “sum” or “soum”) would wildly fluctuate.
Currently, 1 US Dollar trades at 45.53 Kyrgyzstan Som and it is highly likely that the Kyrgyzstan Som would depreciate in the weeks to come due to the government instability as well as a outpour of funds from the rich oligarchy in Kyrgyzstan to safe havens like the US Dollar.
We predicted that the Kyrgyzstan Som may hit the 1 US Dollar against 50.0 Kyrgyzstan Som within the next 3 months with the same rational. Political situation in Kyrgyzstan is Read the rest of this entry »
April 10th, 2010 in
US Dollar (USD) | tags:
central asia region,
europe,
exchange rate,
exchange rates,
forex traders,
kurmanbek bakiyev,
kyrgyzstan,
market capitalisation,
political situation,
safe havens,
stock market,
world bank |
4 Comments
This time round, even the International Monetary Fund has chipped in to say that the Chinese Yuan should be adjusted (re-valuated).
The proponents – United States and India. The opponents – Only China.
The proposition of proponents – Re-valuating the Chinese Yuan will solve the trade imbalance – currently, the United States vs China deficit stands at about 62.4%. This is staggering as much of the imports for Chinese products into the United States translates into revenue for the Chinese. And as long as the revenue streams come trickling in, the China economy will continue to grow – at the expense of the United States.
The cold war between the United States and Russia had already passed with the collapse of the Berlin was in 1989. This time round, the economic cold war between United States and China will be more prolonged Read the rest of this entry »
April 3rd, 2010 in
Chinese Yuan (RMB),
US Dollar (USD) | tags:
chinese economy,
chinese government,
Chinese Yuan debate,
cold war,
economic crisis,
emerging markets,
international monetary fund,
treasury bonds,
us dollar,
usd,
yuan rmb |
5 Comments
The People’s Bank of China Governor Zhou Xiaochuan said today that the Chinese Yuan might be “fine-tuned” to manage the after effect ripples from the global financial crisis which started in Oct 2008.
His comments raised eye-brows because it is not common for Chinese officials to comment on the valuation of the Renminbi as well as the fact that it had been some 18 months since the financial crisis stuck. Are such comments belated?
Regardless of the timeliness of his comments, forex traders would be interested to know the impact of forex market. Currently, 1 U.S. dollar = 6.826 Chinese yuan and it is very unclear whether the fine-tuning means the appreciation or depreciation of the Chinese Yuan (RMB). Most analyst expect the yuan to gradually appreciate over time, which several hedge funds expect to see more signs Read the rest of this entry »
