Looks like they are actually going to let the RMB get stronger.... This is really going to suck for everyone. No more super cheap anything in China. Especially no more cheap mongering for all the foreigners!   



http://finance.yahoo.com/news/Ch ... p;asset=&ccode=

that'll suck the big one....good thing I still have about $5K RMB from my trip from last year.

China wont let its currency appreciate too fast, so dont worry about it. estimates range from 3-5% a year, so that wont affect prices a lot.

what i felt is China should do this little bit earlier for 2~3 years before, the whole situation is not so difficult at that time.

they did change currency at that moment, but not like this time.. just adjust value.

Did you know that the Chinese actually let the currency appreciate by 21% two years ago? It has since only moved 5% in the past two years

Yeah hopefully they back track or have a super slow revaulation. It can't be good for HK for the value of the RMB to go up!


What with the HK dollar peg. If the RMB goes up too much in value HK will have to change the peg or do something to cope with the higher value of the RMB. Only way the do nothing is if the RMB only strengthens very slightly.

does hk currency have a direct relationship with the RMB? What's the link there?

The HK$ since 1983 has been linked to the US$ and as for the RMB, the Chinese try to make it a consistent exchange rate with the US$ since they are the biggest trading partner and China holds so many US$ denominated assets. You can say the RMB is kind of linked as well or as the darn red neck Republicans will call it, currency manipulation. I would make my currency stable too if I had over a billion dollars parked in greenback.

[ Last edited by  geoduck at 21-6-2010 18:18 ]

2~3 years ago, some people suggest un-hooking USD RMB at that time instead of doing appreciate. just maybe China feeling more possible to control all stuffs from now.

honestly, i'm not specialist here. but i felt there will still big change someday later.

remember, while somebody said "no changing" is actually means "no changing AT THIS ONLY".

[ Last edited by  sron63 at 21-6-2010 18:25 ]

The hoopla has started in the markets.  Even the wsj predicts though that the impact will be short lived.  It says most of the currency action will be I'm the sk won and other Asian currencies.  Not the rmb

This text below is quoted from today's SCMP. As had been earlier mentioned, this is just to fend off some hard criticism that would've been expected in this weekend's G20 summit.

"President Hu Jintao may have succeeded in removing the yuan's valuation from debate at this week's Group of 20 leaders' summit, economists and political analysts say. But how much time he's bought depends on how flexible the currency will become.

Days before China's central bank announced on Saturday that the yuan's "flexibility" would increase, officials said the currency's value was not a suitable item for discussion at the G20 meeting in Toronto.

Hu will meet US President Barack Obama and other world leaders at this weekend's summit to discuss items ranging from the global response to the European sovereign-debt crisis to increasing the influence of developing countries in the International Monetary Fund.

US lawmakers threatened to thwart China's wish to keep the yuan off the meeting's agenda. House of Representatives Ways and Means Committee chairman Sander Levin said last week that China needed to act by the end of the summit or risk US legislation that could levy penalties on Chinese imports.

"I think the announcement is in a sense pre-emptive and will probably keep currency off the agenda at the G20 meeting, a well advertised Chinese goal," Nicholas Lardy, a senior fellow at the Peterson Institute for International Economics in Washington, said. "My view is that they have at a minimum bought some time."

The yuan yesterday hit its strongest level since July 2005 when policymakers unpegged it from the dollar and moved to a managed floating exchange rate.

But that was still within Beijing's tight trading band and analysts said China's pledge did not presage a major revaluation.

China's central bank on Sunday reaffirmed it would maintain the yuan's 0.5 per cent daily trading band and said greater yuan flexibility would help cut the trade surplus and reduce the reliance on exports as a driver of growth.

The yuan had been held at about 6.83 to the dollar since mid-2008. The currency appreciated 21 per cent in the three years after a peg to the dollar was scrapped in July, 2005, and replaced by a managed float against a basket of currencies including the euro and the Japanese yen.

The persistent surplus has been a driving force of Washington lawmakers' ire. China is the second-biggest trading partner of the US after Canada and the US is China's biggest single-country export market. Should the yuan resume its appreciation against the US dollar then China could "avoid becoming a target in the spotlight" at the G20, according to Li Cheng, head of research at the John Thornton China Centre at the Brookings Institution.

That will allow China to focus on its own agenda at the meeting. Vice-Foreign Minister Cui Tiankai said on Friday that China wanted to discuss new quotas for the IMF that would boost the power of developing countries, promote the overhaul of global financial regulations, speak out against trade protectionism and pay more attention to economic development in poorer countries."

I wonder if this will slow down the constant devaluation of the USD?

USE gas been very strong, check out the DXY chart... started to toll over though

This will make the US$ stronger as their deficit would be reduced and Euro will weaken further against the Greenback.

The euro is a conundrum.  it still seems too strong against the dollar.  it is very resilent.  with all the problems in europe, to not be south of 1.2 consistently surprises me.  people still want own euro, and any signs of economic recovery give it a bounce, and it probably has alot of upside once the global economy, and europe in particular, recovers.  questions is how long before europe recovers.

I see the euro falling to parity or less with the dollar. The dollar is going to be pretty strong vs. The European countries for a long time. The US may not be doing that well but neither is the rest of the world. USD is still the reserve currency of the world.

thats pretty bold.  it hit like 1.19 at the height of the greek crisis, but only briefly.  what makes you see it tank to parity or below.

Interesting! I have several economic literatures on china, and I have gathered that china can afford to appreciate its currency for now because the export industry is dominant enough to extrude a negligible effect whilst the FDI index of the country can increase a greater proportion.

Recent predictions have the euro at 1.2 by end of year. Holders of euro are spooked. If things don't get better in Europe by august or so them maybe you see it go under that level.

That's a bit of a fall. After the G20 I think if anything there would be more stability in currency markets. China certainly came out well by preempting some China bashing on the exchange rate a the G20. The currency has since appreciated 0.5 per cent and at it''s height just before the the summit, nearly 1%. Great strategic move.