Morgan Stanley: US Dollar to Strengthen on Yuan Move

The US dollar will strengthen against non-Asian currencies, following China’s move to drop the yuan’s two-year-old currency peg to the greenback, according to Morgan Stanley. The People’s Bank of China signaled that it will drop the yuan peg to 6.83 US dollars, which the central bank implemented in order to shield China’s domestic export industry…. Continue Reading

Crude Oil Surges Toward $80 on China Yuan

Crude oil prices are surging in early US trading, following news that China will allow more flexibility for the yuan to appreciate. Crude oil contracts for August delivery are last priced at $79.75 per barrel, adding nearly $1.50 over the previous settlement. The news out of China regarding the yuan has prompted a major rally… Continue Reading

Equities Strong in Early US Trade

Equities markets are rallying in early US trading, as China’s central bank ended a 2-year peg leading into the G-20 summit. The Dow is gaining nearly 1.20% at this hour while the S&P 500 is higher by nearly 1.10%.

Another Warning to China: Beware the Housing Bubble

China is on a “treadmill to hell,” hedge fund manager James Chanos warns of China’s property market bubble. Though not the first to warn of the developing housing bubble in China, Mr. Chanos has a burst date in mind and it may come as soon as this year. Still, while a bursting property bubble may… Continue Reading

JP Morgan: Yuan to Appreciate “Gradually” Against EUR, USD

JP Morgan’s head currency strategist, John Normand, sees gradual appreciation for the Chinese yuan: The Chinese yuan’s appreciation is likely to be incremental and have a limited effect on the world’s principal developed-market currencies, including the U.S. dollar and the euro, according to JPMorgan Chase & Co. China will return to “gradual appreciation” by mid-year… Continue Reading

Goldman Sachs: Yuan to Become Global Reserve Currency

Goldman Sachs’ chief economist John O’Neill sees the Chinese Yuan joining the Euro and US Dollar as a global reserve currency, according to a Bloomberg report: China’s yuan is destined to become a global reserve currency rivaling the dollar and the euro, as the nation’s economic power increases the currency’s allure, said Jim O’Neill, chief… Continue Reading

Asian Currencies Fall on Intervention Fears

Bloomberg is reporting that Asian currencies are heading lower as intervention fears are on the rise: Asian currencies retreated from a 19-month high, led by South Korea’s won and the Taiwan dollar, on speculation central banks will seek to limit appreciation that may hurt exports. The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10… Continue Reading

Goldman Sachs: Buy Overpriced BRIC Currencies

Bloomberg is reporting that Goldman Sachs is bullish on BRIC (Brazil, Russia, India, China) currencies despite Goldman’s proprietary models indicating that these currencies are overvalued: The currencies of Brazil, Russia, India and China are poised to gain even as a model of long-term value suggests they’re too strong, according to Goldman Sachs Group Inc. While… Continue Reading

China Fights Back on US Charges of Currency Manipulation

The Financial Times is reporting Chinese displeasure with US lawmakers over politicizing currency and trade issues: China pushed back on Tuesday against mounting US criticism of its currency policy, saying that the country’s trade surplus was not the result of its exchange rate and warning the US not to “politicise” the issue. “The trade imbalance… Continue Reading

Debate Over Chinese Yuan Manipulation Heats Up

Reuters reports that US lawmakers are pressing for action in Beijing, where an actively depressed Yuan offers the Chinese an unfair advantage in global trade: President Barack Obama faced growing congressional pressure on Monday to get tough with China over its currency practices, one day after Chinese Premier Wen Jiabao brushed off accusations that Beijing… Continue Reading