Market News : China Adjusts Yuan Rate To 8.1100

Discussion in 'Business & Economics' started by bob-bobby, Jul 21, 2005.

  1. bob-bobby Born Again ;) Registered Senior Member

    Messages:
    162
    China scrapped the Yuan's peg to the USD just a few minutes moments ago and tied the CNY to a basket of currencies. The new Yuan rate versus the US Dollar revalues the currency by 2.11%, to 8.1100 per USD as of 1100 GMT.

    (See the central bank web site: www.pbc.gov.cn)

    Under the previous policy, the CNY was kept at 8.2765 per USD, a virtual peg that led the US and other countries to complain that China's currency was unfairly undervalued. The changes came amid intense speculation that Beijing would overhaul its currency regime, which had been basically unchanged since the 1997/98 Asia crisis.

    Please find the official announcement here:

    (Source: http://www.pbc.gov.cn/english/detail.asp?col=6400&id=542)
     
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  3. spidergoat Liddle' Dick Tater Valued Senior Member

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    What are the implications of this?
     
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  5. bob-bobby Born Again ;) Registered Senior Member

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    are you a businessman , if yes are you dealing with china ?

    if yes , you would know the implications !
     
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  7. spidergoat Liddle' Dick Tater Valued Senior Member

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    No, I have no idea.
     
  8. Brian Foley REFUSE - RESIST Valued Senior Member

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    Translation the US $ is collapsing against the Euro , as the Euro is the single currency of the globes greatest single market .
     
  9. wkirby Registered Member

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    Truth be told, the Dollar is rebounding against the Euro, but sometimes facts are meaningless to some. This means one big thing for us Americans . . . products coming from China will be more expensive, meaning greater costs for goods, but also allowing American businesses to more easily compete with Chinese imports.

    -Will
     
  10. River Ape Valued Senior Member

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    1,140
    There's another aspect to be considered apart from the terms of trade. If the Yuan establishes a reputation as a strong currency, it becomes worth holding -- which in turn makes it more attractive as a trading currency. So a businessman in South Korea exporting to Singapore begins to think about doing the deal in Yuan instead of (as at present) US$ or Yen.

    This further increases demand for the Yuan and tends to push the exchange rate progressively higher. Although this is bad news for Chinese exporters, it is very good news for Chinese investors who begin to acquire substantial business interests in other countries. And this is already happening of course!

    In time, China finds itself in competition with the US in the business of what Maoists used to denounce as "imperialism" -- the economic domination of client states. The ideological battle for influence which the US used to fight with the Soviets is superseded by an old-style commercial struggle for economic colonies. Begin to follow events in, say, Venezuela if you wish to see what the future holds.
     
  11. kmguru Staff Member

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    11,757
    Which American business? They are all gone to China...

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    . And greater cost of goods mean...no savings...dip in to grandma's dime jar....
     

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