Featured Stories World News Commentary Money Watch Multimedia Prison Planet U.S. News Science And Technology

Chinese Yuan FALLS The Most In Years

  • Print The Alex Jones Channel Alex Jones Show podcast Prison Planet TV Infowars.com Twitter Alex Jones' Facebook Infowars store

Vincent Fernando, CFA
Business Insider
June 22, 2010

Imagine the global shock should a freely-floating yuan plummet in value against the U.S. dollar. The People’s Bank of China has emphasized that yuan reform doesn’t mean the currency will necessarily appreciate, even though the vast majority of people, including market consensus as shown by forwards, believe so.

After the initial surge post yuan-reform announcement, the yuan just dropped like a rock relatively speaking:

Bloomberg:

The yuan declined 0.2 percent to 6.8111 per dollar as of 10:17 a.m. in Shanghai, from 6.7976 yesterday, according to the China Foreign Exchange Trade system. That was the biggest loss since December 2008. It strengthened as much as 0.1 percent to 6.79 earlier today.

This drop is despite the fact that the yuan’s reference rate was changed to represent a stronger yuan:

The yuan’s reference rate was set at 6.7980 per dollar, compared with 6.8275 yesterday. The 12-month non-deliverable yuan forwards climbed 0.2 percent to 6.6304, implying traders are betting on a 2.7 percent appreciation.

Yes, this could just be normal volatility, and we’re not prepared to bet that the yuan’s long-term path is weaker vs. the dollar, but one has to admit that if there’s any single market opinion right now that is nearly unanimous it is that the Chinese yuan is undervalued.

  • A d v e r t i s e m e n t

Broadly held market views, such as the old ‘housing prices will always go up’ are downright disturbing even when we feel they make sense.

Chinese Yuan FALLS The Most In Years 150410banner7

This article was posted: Tuesday, June 22, 2010 at 4:13 am





Infowars.com Videos:

Comment on this article

Comments are closed.

Watch the News

FEATURED VIDEOS
Kiev Censors MH17 Air Traffic Control Recordings See the rest on the Alex Jones YouTube channel.

Obama Says Israel Has A Right To Defend Its Border While He Collapses The US Border See the rest on the Alex Jones YouTube channel.

© 2013 PrisonPlanet.com is a Free Speech Systems, LLC company. All rights reserved. Digital Millennium Copyright Act Notice.