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China Hits 'Inflow' Panic Button- Strengthens Yuan Fixing By Most In 4 Years
The PBOC strengthened the CNY fixing by over 0.3% today - its biggest fixing move since June 2010 as the Yuan strengthens to 6-month highs against the USD. This seeming 'panic' move comes on the heels of last night's record trade surplus - which as Goldman notes - was likely dominated by FX inflows thanks to over-invoicing. It is unclear the reasoning for the move in the CNY fixing but one wonders if, with industrial commodities continuing to plunge (CCFD collateral value dropping) and now PMIs rolling over, if further over-invoicing is being anticipated as cover for a notable slowdown in growth. One thing is clear - after today's surge in the USD and decoupling with US stocks, something is changing.
CNYUSD falls to 6-month lows (CNY strongest vs USD in 6 months)...
Seems the big jump in the fix was catching down to CNYUSD market movements (inflows following the SPL QE-lite news)...
According to Bloomberg, one trader noted,
CNYUSD selling to an intraday low at 6.1326 is led by leveraged investors, according to FX trader based in Asia.
the PBOC could be sending a “message” about yuan stability amid broader market volatility.
Charts: Bloomberg
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I don't see how yuan is more edible than dollars.
Computers can keep recycling dollars and yuans with less and less real trade going on
Euro will first become worthless, followed by the dollar. The BRICS basket is the new reserve currency of the world. Followed by Bitcoin.
Yen, euro, dollar
Place your bets
AmeriEuro for the real enslavement
SDR, of course.
Yep. Maybe it's time to revise Mayer Amschel Rothschild's often-quoted statement - “Let me issue and control a nation's money and I care not who writes the laws.” - to: Let me issue and control the world's money and I care not who writes the laws.
PUMP dollar worship FED
BUY Gold Silver hard assets
lets see if can get historic down arrows
Long live change.
Nobody wants a strong currency in a race to the bottom world.
A wage earner most certainly does. As does someone who likes to travel the globe.
I recall in reading a decent book called "The Great Inflation" about the german hyperinflation .. the foreign students studying in Germany in that time lived like kings and got the best looking girls all because their "currency was strong" relative to that of the so called "confetti" money.
An exporter however may not appreciate that and nor does the fellow who loses his job..
it's all temporary anyhow : )
I agree but the US govt -fed seems to like a king dollar up 5 in couple months as I sit here and scratch my head of why is the dollar so high and what the hell is the rest of the world thinking.. Maybe Thursday the 11th will show us the hand.
The recent inter market divergences and relationships are just the bastards trying to psyche out and wring out people who are leaning to far to one side of the boat. They will push it WAAAYYY over there and then WAAAYY back over here in an effort to shake em off. They are desperate to squeeze profits out of the markets to fund all of this BS.
Too bad mofos. This here monkey ain't coming off your back.
With China tightening and Europe loosening the dollar is getting pulled from both ends. Could this be how it all unravels?
Mr. Toads Wild Ride
PULL!!!
there is a run to the safety of the dollar, and a run to the strength of the yuan. meanwhile dollar based assets are being bought by foreign held dollars converting cash to assets. this is the beginning of the final lap.
Convert to real assets ASAP.
The games central bankers are playing in supporting their and other currencies has reached a dangerous level, we may be in the "red zone". Currencies are important chips in the commerce of government and the business of running a country. History has shown that in the past both leaders and governments have fallen with the demise of their coin.
We may be seeing the end of the Yen, Euro, and Pound. Money flows could get wild. If people lose faith in the system it could just come crashing down around our ears. At a time when billions of dollars can be traded in just the blink of an eye imagine how fast things could go to hell. More on this subject in the article below.
http://brucewilds.blogspot.com/2013/01/currencies-games-in-danger-zone.h...
A strong USD is inflationary to China, Europe and Japan.
This is by design, not chance - the world powers want a stronger USD and hence higher local inflation.
Although I think China is taking exeption to the higher USD and trying to prop up their currency or risk riots.
The US has been pushing for a stronger yuan for 5 years.
And it came the day that the US's instigated sanctions were agreed upon but didn't happen.
Probably helps euro denominated exporters. The EU guys who voted for sanctions today and will vote again in a couple of days whether to delay imposition of them.
Curious.
As per Jim Willie's predictions. USD will go UP, UP, UP and then collapse.
This phenomena is due to the liquidation of USD based assets, thus a temporary demand for the USD. Holders will then liquidate that USD to something else. Maybe Yuan, commodities, equity, bonds etc denominated in other currencies/countries.
This will be interesting to watch.
with a debt/gdp at 250% China doesn't want CNY to rise also China hasn't been buying UST with $US from trade deficit
http://finance.yahoo.com/news/chinas-central-bank-resolve-tested-042708767.html;_ylt=AwrBEiKksg1UxQgASrLQtDMD
This story reminds me of the old adage, "Be careful what you wish for." China and Russia have been pushing to dethrone the dollar as the world's reserve currency for decades.
The dethroning of the dollar however would create a vacuum that would require a new reserve currency. The Renminbi or Yuan is the most likely candidate. As such, the Chinese Central bank will have to invent more and more creative schemes to keep the Yuan low, else the Import based Chinese economy will crash.
A problem of their own making, but then again, they wished for it.