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davepamn davepamn
 
M$1 June 02, 2009 08:23 PM

Will China allow the Yuan to rise?

A stronger Yuan will increase China's imports, reduce the US trade deficit, and boast domestic demand for US products.

Do you think China will let the Yuan rise?
Interesting Question?  Yes (1)   No (0)   

Interesting: williamwaco

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gladrobot gladrobot
 
 June 03, 2009 07:07 AM
china will allow the yuan to rise slowly. They control their currency creating a basket of asian currencies to leverage their own risk. They own dominating shares of all asian currencies and of course they have about 1.5 trillion in USD.

Dont worry about the rising yuan. the chinese gov't will always provide an advantage for their cheap goods to remain competitive.

You'll never be able to trade their currency on the forex so dont worry about a pip here or there.

The real concern is them dumping their deposits of USD. Their investment in america is a loosing one. That means they will rid themselves of it when their trading partners in the rest of the globe can hedge their exposure against consumptious americans. If they dump the greenback, all hell will break loose.
Asker's Rating:
• You can see the bond market had a mini panic and boost the US Treasury rates up.

5,10,30 year bond yields climbed as demand for bonds dropped.


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arkensis arkensis
 
June 02, 2009 10:17 PM
I don't think that makes total sense - China would most likely be interested in raising it's dollar for the opposite reasons. A more independent economy is more desirable, and there's nothing beneficial in having demand for US products...unless the Chinese have suddenly decided to become benevolent in aiding the US economic recovery.

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