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| China-Japan-Koreas |
| China revalues yuan |
| 2005-07-21 |
| EFL In a move that could trim the trade gap with the United States, China revalued its currency higher against the dollar Thursday and said it would no longer have the yuan tied to a fixed rate against the dollar. ... The statement said China will immediately value the currency at 8.11 yuan, down 2 percent from the 8.28 rate previously. It also said it will now peg the yuan against a "market basket" of numerous currencies, although it will keep the yuan in a tight band rather than letting it trade freely. |
| Posted by:ed |
| #8 I had to read several reports before Bloomberg told me what is going to happen - China's central bank will announce the yuan's exchange rate against currencies such as the dollar each day at the close of trading in China. Sounds like a managed float, rather than a revaluation. MSM reporting on this is particularly dismal. You can either peg against the USD, peg against a basket of currencies, or float (managed or free). You can't do even 2 out of 3, never mind all 3 as some reports imply. The confusion comes from - if you fix the rate daily, then on a day to day basis you can either keep the rate the same (peg) or let it move in the direction the market wants (float). Its a 'have your cake and eat it solution'. I'll bet at this very moment Soros is figuring out how to get a slice. |
| Posted by: phil_b 2005-07-21 15:37 |
| #7 BTW, China (Shanghai) is exactly 12 hours ahead of EST, if you want to catch their market open Thursday evening our time/Friday morning their time. |
| Posted by: Anonymoose 2005-07-21 10:44 |
| #6 Every major government economist in both the US and the EU have been begging the Chinese to do this for at least two years now. Even the Chinese's own gnomes understand entirely that either the Yuan floats of China is going to have an economic crash the likes of which the world has never seen. However, for their part, the Chinese government *have* been duly scared, but scared so much that they want to (maybe not a bad idea), get into the float as incrementally as they can. Right now, internationally, every major player is poised to slam on the brakes if *any* major fluctuation happens, and today's float has been quietly scheduled for six months now. If an when this works and China makes it to full float without disaster (they are still going to have a major downturn, it is unavoidable), world markets are going to jump with glee. |
| Posted by: Anonymoose 2005-07-21 10:39 |
| #5 Not good news for Wal*Mart, though I've seen analyses that say the Chinese cost of products is so low it could increase several times before having an impact at retail. |
| Posted by: Mrs. Davis 2005-07-21 10:08 |
| #4 The chinese were losing a FORTUNE by propping up the dollar. They knew it was getting worse and worse for them the more they did it... this had to be done, as a matter of fact it was already done to late but if they waited longer it could have been a fatal blow to the chinese economy. Expect to see the dollar drop over the coming weeks and the breaks start to slam on the chinese economy (hopefully it won't go into reverse...) |
| Posted by: Damn_Proud_American 2005-07-21 09:38 |
| #3 They obviously want to have their cake and eat it to. Pegging the yuan trading to a marketbasket of unknown currancies is a real central planning solution. This isn't much, for now, but the markets may force the Chinese to amend their policy. Look for the possibility of more changes in the next two weeks, as this idiocy fails. |
| Posted by: Chuck Simmins 2005-07-21 09:26 |
| #2 Trying to ease their debt burdon, or making it so a war with the US over Tiawan is less painful? |
| Posted by: mmurray821 2005-07-21 09:14 |
| #1 The Shanghai market isn't freaking out yet, but they may have made the announcement on close. Check this chart later today: http://finance.yahoo.com/q/bc?s=000001.SS Other international market indices: http://finance.yahoo.com/intlindices |
| Posted by: Anonymoose 2005-07-21 09:03 |