The Chinese yuan rose about 25% since it was depegged in 2005 to reach a peak of 6.28 against the US dollar in May 4th. Since then, USDCNY fell 1.90% as China’s current account surplus tumbled to CNY 24.7bn –the lowest since 2004.
As China continues to issue data required to convince the world of its inability to strengthen its currency, markets may reach a point of requiring other central banks to do more. Mining giant BHP Billiton issued another warning is weekend that will reduce its cost base and slash non-essential spending as the cooling Chinese economy "significantly" impacted profitability. Slowing commodity demand due to Europe's debt crisis and slowing China was also hitting the Anglo-Australian miner's bottom line.
One day after Draghi hints at a shock-&-awe solution from the ECB, German Finance Minister Schaeuble starts the week by denying reports that the EFSF could start buying Spanish sovereign bonds (his Sunday comments to Welt Sonntag). If Germany’s denials continue to hit the wires at the same time that Greece tripartite collation publicly struggles to agree on slashing the budget by €11.7bn then it would be difficult for EURUSD to maintain its rebound above $1.2350. This would especially the case if the FOMC does another “copy & paste” instead of hitting the “print” button, vying for more QE. We expect the FOMC to extend its “exceptionally low” rate phraseology to 2015 from the current “through 2014”.
Disclaimer The analysis we provide is based on the average estimate of price movements in one day. Does not guarantee what we deliver is actually a proper and correct. Everything that happens in the decisions you make on your trading transaction is to be Your responsibilities. Visit Us www.deryworldscorp.web.id
No comments:
Post a Comment