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Revaluation of the Yuan ?

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  1. #1

    Revaluation of the Yuan ?

    I read this today
    "China said it will allow a more flexible yuan, signaling an end to the currency's two-year-old peg to the US dollar"

    Any idea if this will impact the HKD as well?

    For those that have been in HK long enough - when they revalued the yuan against the USD last time, did they also revalue the HKD?


  2. #2

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    No - the HKD is completely independent of the RMB and locked to the USD at 7.75-7.8. The HKD/USD exchange rate hasn't changed during the period that the RMB rate has moved from about 8.3 to 6.8.


  3. #3

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    The smart people are converting HKD to RMB now. The banks have been reporting a dramatic surge in RMB deposits over the last 6 months.

    The Chinese govt has been holding the RMB to the USD (therefore also HKD) for the last two years. But there is enormous pressure for the peg to be lifted and the RMB to appreciate significantly.


  4. #4

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    Er...... Actually what being commented upon is the political spin + journalistic licence needed to generate column inches and give those that need it, face to say " we are still powerful enough to effect events ". Sad really

    The ACTUAL statement ( The People's Bank of China--News ) says absolutely Sweet FA and shows business as usual. The RMB has been intentionally flat for some time and indicators always pointed to it starting to appreciate in Q4, it would all depend upon IF it was in China's interest. However that sort of talk is not PC and doesn't get you column inches.

    China politicians are actually repeating the non PC line, you just have to pick out the relevant words that ensure ambiguity in what could be seen as a change in policy.

    shri likes this.

  5. #5

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    As as if by magic --
    China's yuan rises after flexibility pledge | Reuters
    if only the headlines matched the data
    Exchange Rates Graph (American Dollar, Chinese Yuan)

    Should financial jurnos REALLY be taken seriously if the try to make a day of data quack like a duck, even when its not walking like one.

    Last edited by Boris; 21-06-2010 at 03:07 PM.

  6. #6

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    Quote Originally Posted by Boris:
    As as if by magic --
    China's yuan rises after flexibility pledge | Reuters
    if only the headlines matched the data
    Exchange Rates Graph (American Dollar, Chinese Yuan)

    Should financial jurnos REALLY be taken seriously if the try to make a day of data quack like a duck, even when its not walking like one.
    Well, to be fair it did increase a bit "After the People's Bank of China (PBOC), the central bank, set the daily reference point for trading, the yuan rose by 0.45 percent to as high as 6.7969 per dollar -- the biggest intraday rise since China revalued the currency in 2005."

    Whether 0.45% should be called "surged" (as the reuters article does in bold) is a different question.

  7. #7

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    rmb forwards is trading at 6.6


  8. #8

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    Here we go, first of several moves over the next 3 - 6 months?