Yuan Watch

[arco]

..................in a G-7 communiqué Oct. 19, Rato explicitly mentioned only one currency, the yuan, in his comments.

China and other Asian states should introduce greater flexibility of exchange rate regimes to smooth out global trade imbalances, Rato said.

The yuan climbed to a post-revaluation high against the dollar recently as international pressure mounted on China to allow the currency float freely.........................

http://www.iht.com/articles/2007/10/28/business/imf.php

[arco]

Quoting David Andrew Taylor

http://seekingalpha.com/article/3546...buffett-buying


....Chinese yuan.

I like this currency in the long run. It's at an artificial low against everything, and climbing. Plus, the upside of the economy is huge. Much bigger potential here than in the U.S.

So, if Buffett were to have purchased Chinese yuan, then he'd be in a great position to purchase a few companies. He's likely to see a 50% increase in his currency appreciation over the course of a few years. .......... Buffett has already purchased big stakes in at least one Chinese company, PetrolChina (PTR). So, we know he's open to the idea.

Not sure why most of the articles I read missed the Chinese yuan as a potential purchase for the Oracle of Omaha. But there it is plain as day.

[peat]

Strange looking chart for USD/CNY - it only goes in one direction!!
but I've opend a short in demo for monitoring purposes only.

and just for a bit of balance ... ;+) this article has a bit of a different viewpoint on
a - the yuans undervaluation
b - who is a currency manipulator

Its sounds very 'vested interest ' and written by a Chinese person (I assume) but he's chairman of a NY based investment bank.

http://www.globalresearch.ca/index.p...articleId=4816

[arco]

Chinese Comments Send U.S. Dollar Tumbling Against Major Currencies

(RTTNews) - The U.S. dollar fell to a new low against the Euro and also fell significantly against other major world currencies. The fall was partly attributed to a Chinese officials comments about foreign currency holdings. The greenback is trading at 1.4618 against the euro, 2.0921 vs. the British pound sterling, .9133 against the Canadian dollar and .9346 against the aussie.

The greenback has bounced back in the past 15 minutes following a "clarification" by the Chinese official

[peat]

my demo short USD/CNY from the day we mentioned this is +415 - but thats not much really. each pip is 0.2 of a USD.

[arco]

Hi Peat

Steady movement - more like a long term investment perhaps.

I wanted to edit the previous post....but editing not available after
a short period of time....it wasnt that clear why the Dollar slumped, but
here it is..............

11/6/2007 11:09:40 PM The euro spiked sharply around 9 p.m. EST on comments from a Chinese official who suggested that China diversify its Forex reserves in favor of the euro over the U.S. dollar.

China needs to stabilize yuan rise expectations - central bank staff report

Wed, Nov 7 2007, 04:45 GMT
http://www.afxnews.com

BEIJING (XFN-ASIA) - Widespread expectations that the yuan will continue to appreciate are at the root of China's monetary problems and a number of steps need to be taken to dampen them including reforming the current exchange rate regime, according to a report prepared by a department head at the People's Bank of China.

Guo Jianwei, the director of the interest rate division of the monetary policy department at the central bank, said in a paper that controls on the capital account are "virtually ineffective," allowing speculative funds to continue to pour into China to bet on yuan appreciation.

These inflows dent the effectiveness of the central bank's monetary policy tools, such as interest rates and sterilization operations, Guo said in the paper, which was distributed at a financial conference here.

"China should enhance the monitoring of capital inflows and put into effect a foreign exchange rate corridor system as soon as possible. That is to say, to let the exchange rate fluctuate around a relatively fixed target and maintain this fluctuation within a wide range for 2-5 years," he said, referring to this proposed regime as a "relatively flexible exchange rate system."

bjburo@xfn.com

rgds - arco

[arco]

[arco]

China Rejects Europe’s Call for Currency to Rise Faster

By DAVID LAGUE

Published: November 28, 2007
BEIJING, Nov. 27 — China signaled Tuesday that it would resist European demands for rapid appreciation of the yuan and would instead continue gradual progress toward a more flexible exchange rate.
As Beijing comes under increasing pressure to curb its soaring trade surplus with Europe, Prime Minister Wen Jiabao told the visiting French president, Nicolas Sarkozy, on Monday that China was determined to move at its own pace in permitting its currency to trade more freely, the state-run media reported.
The European Union, China’s biggest trading partner, accuses Beijing of holding the yuan at an artificially low level to assist Chinese exporters, contributing to the trade imbalance. China’s surplus is forecast to widen 30 percent this year, to 170 billion euros, ($252 billion).
While Mr. Sarkozy was winding up his three-day visit Tuesday, a delegation of European monetary officials, including the president of the European Central Bank, Jean-Claude Trichet; Prime Minister Jean-Claude Juncker of Luxembourg; and the European Union monetary affairs commissioner, Joaquín Almunia, began two days of talks in Beijing.
“We will have a large tour d’horizon on all matters, including of course the currency question,” Mr. Trichet said in Beijing, referring to the coming broad survey of policies, Reuters reported.
The United States, the No. 2 trading partner with China, and other developed economies are also demanding that Beijing allow its currency to appreciate more rapidly.
Treasury Secretary Henry M. Paulson Jr. will lead a delegation of senior Bush administration officials to Beijing next month for a third round of regular economic talks, during which China’s trade surplus will again come under scrutiny, trade analysts have said.
Senior Chinese leaders have said they want more balanced trade but have so far refused to give ground on currency policy.
While China is criticized for what its trading partners say are unfair barriers to foreign products, rampant intellectual property theft and the poor quality of some of its exported goods, it is the value of its currency that draws the most hostility, trade specialists say.
Since Beijing allowed a 2.1 percent increase in the value of the yuan against the dollar in July 2005, it has allowed the currency to appreciate by almost 10 percent. Most analysts expect this to continue.
But the Chinese currency has declined sharply against the euro, and some European monetary specialists say it is undervalued by as much as 25 percent.
Chinese officials and some trade experts counter that the trade statistics alone can be misleading.
They note that exchange rates and trade balance figures are part of increasingly complex international commercial relationships.
Chinese government officials say that foreign businesses based in China are benefiting from the export boom just as much as local manufacturers.
More than 50 percent of exports from China in the first nine months of this year were shipped from factories with foreign ownership, according to Chinese government and European Union statistics. The customs value of these exports when they leave Chinese ports does not take into account the value of materials, technology or design from abroad.
Chinese officials also say the trade statistics fail to reflect the benefits that foreign retailers and consumers gain from the flood of cheap, good-quality Chinese manufactured goods now widely available in international markets.
Some trade experts say that even if Beijing did allow a sharp increase in the value of the yuan, there is no guarantee that this would lead to an immediate change in the trade balance.
They note that in response to international pressure, Japan allowed the yen to rise for long stretches in the 1990s without significant impact on its trade surplus.
Foreign companies and governments would be better advised to pay attention to China’s numerous barriers to imported goods and services, according to Chinese and foreign trade experts.
The European Union estimates that these barriers cost European businesses about 20 billion euros in lost trade each year.

NYTimes

[peat]

The Chinese central bank has proposed that a yuan trading center be created in Hong Kong, Shanghai Securities News reported Feb. 28. Should such an offshore trading center become a reality, it could hasten China’s financial integration with the rest of world and boost the yuan’s potential to become a major regional trading currency. China, however, is not about to challenge the dollar bloc just yet.

[Crypto Crude]

My prediction is that 1NZ=2Yuan in the future as Government moves away from fixed to floating as market reform and govt policies change over time....
this is a long term view....
I am buying Yuan this year...

.^sc