This morning on Foreign Exchange Boris Schlossberg from DailyFX raised an interesting point that the yuan has rallied against the yen and that and some point it creates a competitive issue for China.I don't know what the fallout will be but we could hear more about this in the next few weeks.
If you don't know, the G7 is meeting and the yen's weakness could come up in the talks. Again it is tough to know for sure but the move of late has been swift and Schlossberg noted that it is very oversold.
2 comments:
EverbBank reports that Russia changed it's $/Euro reserve mix yesterday. Quite a few other govt's as well. Big changes afoot.
All of the Asian central bankers including Thailand, Korea, Taiwan, Philippines, and Indonesia work off the "Renmimbi standard." They all are competing with China. That's why Thailand's junta meddled recently, to keep the Thai bhat down.
The only government in the world who's not trying to knock down its currency FX rate is the US. We do dumb things like try and get China to revalue upwards, while ignoring Japan. Can't walk and chew gum! OldVet
I have been amazed by how much has been written about the weak yen as a result of the "carry trade". Even Central Banks are getting into the discussion. I would think that even if it is not announced afterward the "Carry Trade" will be discussed in one form or another. Everyone I talk to has some form of a carry trade on (or they know someone who does), this can be dangerous. I just wonder if it could turn into another Long Term Capitol situation
Post a Comment