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Onshore Yuan Has Been In Freefall Since The IMF Added China To The SDR Basket
For the 5th day in a row, Onshore Yuan has tumbled against the USDollar. Absent the violent devaluation in August, this is the largest drop since March 2014, leaving the Chinese currency at its weakest level against the USD since August 2011. It appears that after showing some signs of 'stability' to appease The IMF's political decision, and following the weak trade data this week, China has decided to escalate the currency wars, perhaps in anticipation of (or in an attempt to stall) any market turbulence when The Fed hikes rates next week and withdraws up to $800bn in liquidity from global markets.
Onshore Yuan is now at its weakest since August 2011...
As it seems, with the blessing of The IMF, China has begun its competitive devaluation efforts...slowly and under the cover of darkness from America's mainstream media...
Put simply, something is going on as the world's money markets prepare for what lies ahead next week and the asset classes with the most risk (see CCC US Corps, EM FX, Oil) are the first to suffer before the effects of shortened collateral chains ripple up into mom-and-pop's 401k.
Charts: Bloomberg
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"When" the Fed hikes rates next week? I'll believe it when I see it.
CNY is going to 6.7-6.8.
Watch the spread though between offshre/onshore, if it gets too wide then you may see PBOC intervention selling dollars to bring spread back into line.
"CNY is going to 6.7-6.8."
Such optimism.
IMHO, China and Saudi Arabia are both likely going to devalue deeply in 2016 -even if Yellen never touches the stick.
Their economies are both horribly unbalanced.
Both are trapped in self-reinforcing merchantilist feedback loops their cultures cannot escape without destroying their repsective oligarchies/govenments.
The ECB will force their hands if the BOJ doesn't.
Any speculation out there about if China will de-peg the yuan from the dollar all together? And what would happen if they did? Would that be the same point at which they back it with a percentage of their phyzz gold stash?
The IMF screws everything it touchs.
devalue, de-peg, or whatever, it will be chaotic. But i don't think it's unison move with fed rate hike, more like double whammy to me.
Chicoms not in the Zionist game plan. Good for them.
"Chicoms not in the Zionist game plan." say what???
https://www.google.com/search?q=kissinger+meets+mao&biw=1600&bih=799&tbm...
think there's no connection with the recent fad of prominent zios dating chi-coms?
btw, zuckerburg, congrats on your new baby. way to bridge the divide...very noble and 'progressive' of you.
janus
Pretty sure if they were on board the Chicoms would be buying T bills instead of selling.
you say that as if the zios favor the US.
the zio plan and mentality is to destroy everything for the benefit of a very few.
not too long ago there was a book in china advocating that its citizens think more like the jew...it was a best seller. we'll see how much the chinese appreciate jewish thinking very soon.
here's the thing: for long time (at least since wwii), america was the central and necessary agent for administering an internationalist agenda, now it is the greatest impediment to the administration of an internationalist agenda.
my guess it that you will see endless examples of various nations' leaders acting in ways that are contrarty (if not outright hostile) to the interests of their country and its people. it will be confusing on its surface; unless you understand that they are deliberately and consciously acting against the interests of their country and its people for the sake of an internationalist agenda.
janus
"The IMF screws everything it touchs."
Christine is one of the oligarchs
Wow, big deal - a devaluation of another 4%? How terrifying, wake up the kids. The EURUSD moved 4% in a single day last Friday; the USDJPY lost 40% in the span of a couple of years.
if they didnt have the intention to hike, they wouldnt be bullshitting the numbers to make it 'appear' reasonable
mmhmmmmm
r
The global bankers are playing financial chess on a three dimensional board except its not really chess its more more like Russian roulette using chess pieces with the occasional OCheckers thrown in.
i think it's a lot more like the southpark episode with the chicken on the game board.. with the exception that they first and foremost make sure that they personally have enough stashed somewhere for when it all comes crashing down.
Two years ago some connected people (here in China) told me the target is 5 RMB to $1. The Yuan is not "in freefall". This is all part of a long term plan. Keeping the Yuan cheap keeps the Chinese factories working, although not making the huge profits they were before.
Will this "melt the Dilithium Crystals"? Or anything else or precious value, like Gold, for example?
Didn't think so. So it's more Association of Fiat Casinos at play.
>>>
...when The Fed hikes rates next week...
<<<
Not so sure about that.
Watson
The Fed will hike rates 1/87th of 1% to show economic outlook is improving. No banks are programmed to accept that amount as they only added 2 more spots during y2k to save money. The Fed leaves rates at 0% with an implied rate hike in place showing they are in control. It's a win win.
China is smart, using the IMF as the tools they are. LOL
Zero Confidence in the USSA.
China is in deep shit....economy in a free fall, real estate going to blow up, huge wealth disparity within a "communist" country....tremendous amount of social unrest....they now have to fund a geographically dispersered military....smart is not a word that comes to mind when I view their leadership....
China is going to wish it never was added to the SDR basket... let the manipulation begin.
If you play in the real world you no longer have the luxury of a fixed peg, shit show soon.
you could be right. It will be bad for rest of Asia.
Damn, China shakes hands with the West in the morning and sharpens their knives in the evening.
More China imports loved by the US.
a couple of points of order...
1) the yuan won't be added to the XDR basket until Oct. 1 2016
2) its percentage of the basket will be set at 10.92% (more than the yen and pound, a third of the euro percentage and a fourth of the US percentage)
this is a chance for China to demonstrate that they can wear their big boy pants... time will tell...