China Revalues Yuan

[Firefan]

Some good points indeed tiger!

However; when the economy recovered after the 97/98 debacle the Thai Baht did not move much (after stabilizing) from the 40 Baht mark though. I.e. the IMPROVED economy did NOT reflect itself in the THB. Why not? Well, as I mentioned I believe that most Asian countries on purpose have manipulated their currencies in order to remain competative with mainly China (who officially controlled their currency).

We will see how it plays out in the future. Cheers!

[PeaceBlondie]

Maybe someone commented on this, but how does the increase in the value of the yuan affect China's massive holding of foreign currencies, such as US bonds?

My Chinese friend in America is happy that this revaluation gives him a big boost in the dollar value of his condo in Shanghai, which already doubled in value. He thinks the yuan may increase a total of 10% in the next 6 to 12 months. I doubt that will affect international trade by much.

[~G~]

...He thinks the yuan may increase a total of 10% in the next 6 to 12 months.  I doubt that will affect international trade by much.

<{POST_SNAPBACK}>

How much is much? I believe it will not be much, it will be very much

Edited July 24, 2005 by ~G~

[~G~]

To Harmonica:

Following the discussion we had in another thread about Events, Mass Social Mood and Trends , I believe this is a good example of a sudden Event causing a Trend, rather then MSM creating Trend. Tech. Analysis relies on MSM reflected in the graphs, but what happens when a new piece of information that was previously not known to the Masses is being discovered?

<{POST_SNAPBACK}>

G,

Not true! See evidence below in the chart.

The US Dollar Index had already started a correction on July 8 . No talk of Yuan or even Don Juan at that time! Yuan news came out on July 21

Events only happen in line with the existing TREND!

The existing trend as of the TOP on July 8 is a wave 4 downward correction OR it could also be an actual intermediate-term correction of the $ -- either way it is a downward, negative correction! So there is NO violation of the rule!

The 2 trends we are speaking of here are (1) short-term & (2) intermediate-term.

As you will see in the chart the intermediate-term trend is not even threatened just yet, as the uptrend line has not even been approached!

And generally speaking, there is a possibility that an event can occur within minutes of an actual long-term trend change -- but such can only be verified after the fact and with the help of real-time data. But, historically to date no violation that I'm aware of, has occurred!

<{POST_SNAPBACK}>

The impact of this event is yet to be seen; especially if this is only a first step out of many. Forex traders are always informed and act immediately; consumers will start to feel the rising prices later. May I ask you when do you expect the end of this correction?

In any way, I will accept that this is not a change of trend as long as your support line holds!

[expatinasia]

"My Chinese friend in America is happy that this revaluation gives him a big boost in the dollar value of his condo in Shanghai, which already doubled in value. He thinks the yuan may increase a total of 10% in the next 6 to 12 months. I doubt that will affect international trade by much."

How long has it been since your Chinese friend has been back to Shanghai? Within the last 6 weeks, the Chinese government has changed its tax code sufficiently to cause property values in Shanghai to decrease sharply. The revaluation of the yuan does not automatically equate to a higher dollar selling price. In Fantasyland, perhaps, not in real life. The revaluation of the yuan makes Chinese imports more expensive, and that should make an impact on international trade with China. But, what do I know? I don't have a Chinese friend in America...

[~G~]

"My Chinese friend in America is happy that this revaluation gives him a big boost in the dollar value of his condo in Shanghai, which already doubled in value. He thinks the yuan may increase a total of 10% in the next 6 to 12 months. I doubt that will affect international trade by much."

How long has it been since your Chinese friend has been back to Shanghai? Within the last 6 weeks, the Chinese government has changed its tax code sufficiently to cause property values in Shanghai to decrease sharply.  The revaluation of the yuan does not automatically equate to a higher dollar selling price.  In Fantasyland, perhaps, not in real life.

<{POST_SNAPBACK}>

Why spoil his good mood? Let him stay happy as long as he can!

Edited July 25, 2005 by ~G~

[Thaiquila]

Maybe someone commented on this, but how does the increase in the value of the yuan affect China's massive holding of foreign currencies, such as US bonds?

<{POST_SNAPBACK}>

It probably means that over time the Chinese and other countries will be buying fewer US bonds (as they move away from pegging to the dollar). This would result in higher interest rates on long term bonds (and a loss of principle if owning such bonds already). It would also put pressure on the US government to create policies to increase the domestic savings rate, as now Americans are very poor savers, because the US will no longer to be able to rely on the rest of the world to bail them out for this shortcoming.

Stay tuned.

[simcity]

perhaps time for more gold then .

[Harmonica]

... (if only I had the capital to spare)

Don't keep us in suspense. If you did, exactly how would you allocate it?

OAH, I respect your record on what I've seen of your posts- respect mine when I say, my record as a businessman would not impress many. I'll keep my hypothetical strategies to myself, since strategies without capital are akin to "armchair" (or in this case keyboard;) fiscal weekend warriors....

I therefor refer further advice to the Harmonica's/Soros's of the world.

That's twice in a 36-hr period you've called me by name!

If you're going to propose, I prefer the direct approach instead of the sneaky one!

This is another one of those posts where I'm trying to get on the thread and learn. That being said I amazed that the baht went to 39 yesterday afternoon and back to 41 this morning. I'm also amazed that I actually have time now to watch this kind of thing.

Ray,

Where did you see Baht @ 39 yesterday?

The site FX History http:// www.oanda.com/convert/fxhistory

Was at 42 in the morning dropped to 39 after the news and back to 41 today

Ray, the low was not 39. I would not recommend Oanda; their charting leaves alot to be desired.

The Baht hit a low of 41.15 after the news on that fateful day. It did NOT go below 41.

[Butterfly]

Obviously the more China free floats their currency and does not peg to the dollar, the weaker the dollar will be to the Yuan.

There is talk now that Walmart in the US could be devastated if this happens, because they are so big, they rely almost totally on cheap Chinese imports, and they have razor thin margins.

This leads me to believe that it is not in the interest of any country for China to make a radical change quickly, it will hurt a lot of people everywhere.

But this trend is probably going to continue.

What I am confused about is the effect on baht vs. US dollar. The baht is not pegged to the dollar, and I would assume Thailand has a lot of trade with China, so it seems to me that the long term effect on the baht dollar relationship is more complicated and maybe a little harder to predict.

<{POST_SNAPBACK}>

Experts seem to think the Thai bath will strengthen. I am not sure about that. The mechanics seems quite complex to conclude so easily that the Thai Baht will strengthen.

Currently it's still floating around 41, so I don't see the 36 rebound yet coming. I don't see this to happen as it would hurt Thai companies export, the #1 resource for Thailand. Already Thai companies had a bad year in terms of earnings because of last year strong Thai baht (thanks Mr Toxin).

[ray23]

... (if only I had the capital to spare)

<{POST_SNAPBACK}>

Don't keep us in suspense. If you did, exactly how would you allocate it?

<{POST_SNAPBACK}>

OAH, I respect your record on what I've seen of your posts- respect mine when I say, my record as a businessman would not impress many. I'll keep my hypothetical strategies to myself, since strategies without capital are akin to "armchair" (or in this case keyboard;) fiscal weekend warriors....

I therefor refer further advice to the Harmonica's/Soros's of the world.

<{POST_SNAPBACK}>

That's twice in a 36-hr period you've called me by name!

If you're going to propose, I prefer the direct approach instead of the sneaky one!

<{POST_SNAPBACK}>

This is another one of those posts where I'm trying to get on the thread and learn. That being said I amazed that the baht went to 39 yesterday afternoon and back to 41 this morning. I'm also amazed that I actually have time now to watch this kind of thing.

<{POST_SNAPBACK}>

Ray,

Where did you see Baht @ 39 yesterday?

<{POST_SNAPBACK}>

The site FX History http:// www.oanda.com/convert/fxhistory

Was at 42 in the morning dropped to 39 after the news and back to 41 today

<{POST_SNAPBACK}>

Ray, the low was not 39. I would not recommend Oanda; their charting leaves alot to be desired.

The Baht hit a low of 41.15 after the news on that fateful day. It did NOT go below 41.

<{POST_SNAPBACK}>

That was the first time I saw it move like that. What is a better source easy to understand please

[Harmonica]

... (if only I had the capital to spare)

Don't keep us in suspense. If you did, exactly how would you allocate it?

OAH, I respect your record on what I've seen of your posts- respect mine when I say, my record as a businessman would not impress many. I'll keep my hypothetical strategies to myself, since strategies without capital are akin to "armchair" (or in this case keyboard;) fiscal weekend warriors....

I therefor refer further advice to the Harmonica's/Soros's of the world.

That's twice in a 36-hr period you've called me by name!

If you're going to propose, I prefer the direct approach instead of the sneaky one!

This is another one of those posts where I'm trying to get on the thread and learn. That being said I amazed that the baht went to 39 yesterday afternoon and back to 41 this morning. I'm also amazed that I actually have time now to watch this kind of thing.

Ray,

Where did you see Baht @ 39 yesterday?

The site FX History http:// www.oanda.com/convert/fxhistory

Was at 42 in the morning dropped to 39 after the news and back to 41 today

Ray, the low was not 39. I would not recommend Oanda; their charting leaves alot to be desired.

The Baht hit a low of 41.15 after the news on that fateful day. It did NOT go below 41.

That was the first time I saw it move like that. What is a better source easy to understand please

http://www.gftforex.com/products/dealbookfx/download.asp

Go to this place Ray, register for the free demo and download their offered software workstation. Very classy outfit and international to boot. Thai Baht is one of the currency pairs offered -- relative to the $ and Yen.

When you're upto speed, click for the Thai Baht chart and change the period to 60 minutes or under -- easier then to see the lows for the last several days.

[ray23]

... (if only I had the capital to spare)

<{POST_SNAPBACK}>

Don't keep us in suspense. If you did, exactly how would you allocate it?

<{POST_SNAPBACK}>

OAH, I respect your record on what I've seen of your posts- respect mine when I say, my record as a businessman would not impress many. I'll keep my hypothetical strategies to myself, since strategies without capital are akin to "armchair" (or in this case keyboard;) fiscal weekend warriors....

I therefor refer further advice to the Harmonica's/Soros's of the world.

<{POST_SNAPBACK}>

That's twice in a 36-hr period you've called me by name!

If you're going to propose, I prefer the direct approach instead of the sneaky one!

<{POST_SNAPBACK}>

This is another one of those posts where I'm trying to get on the thread and learn. That being said I amazed that the baht went to 39 yesterday afternoon and back to 41 this morning. I'm also amazed that I actually have time now to watch this kind of thing.

<{POST_SNAPBACK}>

Ray,

Where did you see Baht @ 39 yesterday?

<{POST_SNAPBACK}>

The site FX History http:// www.oanda.com/convert/fxhistory

Was at 42 in the morning dropped to 39 after the news and back to 41 today

<{POST_SNAPBACK}>

Ray, the low was not 39. I would not recommend Oanda; their charting leaves alot to be desired.

The Baht hit a low of 41.15 after the news on that fateful day. It did NOT go below 41.

<{POST_SNAPBACK}>

That was the first time I saw it move like that. What is a better source easy to understand please

<{POST_SNAPBACK}>

http://www.gftforex.com/products/dealbookfx/download.asp

Go to this place Ray, register for the free demo and download their offered software workstation. Very classy outfit and international to boot. Thai Baht is one of the currency pairs offered -- relative to the $ and Yen.

When you're upto speed, click for the Thai Baht chart and change the period to 60 minutes or under -- easier then to see the lows for the last several days.

<{POST_SNAPBACK}>

Thanks I appreciate it