All Entries Tagged With: "yuan"
US Senate to Force Trade War with China?
On Monday, the U.S. senate voted to begin the debate on a bill that would place trade restrictions on countries deemed to be undervaluing their currencies. The Chinese would be the key target of the bill, as China has been widely characterized as a currency manipulator by many economic commentators. On Tuesday, the Chinese government [...]
Lack of a Debt Deal Angers Chinese Leaders
On Thursday, Morgan Stanley’s Stephen Roach—chairman of Morgan Stanley Asia—stated that Chinese officials were “appalled” by the debt ceiling delay. According to Bloomberg, Roach stated, “coming so shortly on the heels of the subprime crisis, the debate over the debt ceiling and the budget deficit is the last straw [for China].” Why are the Chinese [...]
Brazilian Government Intervenes to Prevent the Real from Appreciating
On Wednesday, the Brazilian real plummeted sharply, deprecating over 1%. This came a day after the real had reached its highest value against the U.S. dollar in over a decade. The move may have come as a result of the Brazilian government’s decision to impose a 1% tax on certain foreign exchange derivatives. In effect, [...]
Can Destroying the Dollar Create American Jobs?
In recent days, a number of major U.S. corporations have reported solid earnings. JPMorgan Chase (NYSE: JPM) beat estimates, while Google (NASDAQ: GOOG) absolutely trounced expectations. Yet, while major American corporations are performing admirably, the job market continues to struggle. Despite massive fiscal stimulus, unemployment remains persistently above 9%. Bloomberg’s Rick Wartzman cites a growing [...]
Is Inflation in China Getting Out of Hand?
On Saturday, China’s June inflation data was released. Reuters reports that Chinese inflation hit a three-year high in June, reaching a rate of 6.4%. Zhou Xiaochuan (governor of the People’s Bank of China) said that it was important to make the goal of achieving price stability “more prominent.” Back in March, Chinese Premier Wen Jiabao [...]
Chinese Hike Rates to Fight Inflation – Will the Policy Backfire?
On Wednesday, the People’s Bank of China opted to increase interest rates by 25 basis points, Bloomberg reported. The move appeared to affect the international markets, as the price of WTI Crude oil declined nearly 0.3% on Wednesday, and the U.S. dollar index rallied roughly 0.5% to approach the $75 mark. As the Chinese hike [...]
China’s Banking Woes
Two recent articles published by Caixin Online point out different, but related problems facing Chinese banks. The first notes something that many have long suspected: China’s appreciating exchange rate has cost the country a lot of money – more than $2 trillion. The second article questions the value of assets held by China’s banks. The [...]
Chinese Trade Surplus Skyrockets, Yuan Inches Up
China’s trade balance for the month of April shot up to $11.4 billion dollars, far above the expected rise of between $1 billion and $3 billion. The jump has been attributed to a weaker-than-it-needs-to-be yuan. Chinese imports slowed in April, from year-over-year growth in March of 27.3% to 21.8%. Exports rose by 29.9% in April, [...]
More Sentiment for a Chinese Appreciation
US Federal Reserve chairman Ben Bernanke’s history-making press conference, following a meeting of the Fed’s open market committee last week, didn’t produce any surprises. The Fed plans to continue its QE2 program until its scheduled expiration at the end of June; core inflation is not yet a problem; and there is no interest rate hike [...]
Investing China’s Forex Reserves
The People’s Bank of China is considering the establishment of a new fund that would use the country’s $3 trillion in forex reserves to invest in something other than the dollar. One possibility being bandied about is that the country will use some of its reserves to purchase gold or silver or other commodities, reducing [...]
