Hi Maurice, <<The ECB confirmed it had acted on the Bank of Japan's behalf but the Federal Reserve refused to comment.
The action came in London afternoon trading and analysts said the move was carefully planned.
"This was good timing - they waited until US traders were in and the US data were out of the way, but made the move ahead of the 4pm fixing point when funds will close their books for the quarter," said Chris Furness, senior currencies strategist at 4Cast, the economic consultancy>>
I am a free-trader and free-marketer, living in Money Rock Hong Kong and Freedom Mountain Kowloon.
I say 'intervention' is 'manipulation', and 'manipulation' will, in many ways, fail against the Force known as the market, sooner or later. Nope, do not trot out the HK 1998 intervention to ruin your portfolio allocation; here is why:
We know much about intervention and about the Force. The 1998 HK government's direct purchase of Hang Seng Index shares was not intervention. It was counter-intervention against the unnatural acts of the hedge funds, which in themselves, when distilled down, was also counter-intervention agaist the seemingly unnatural pegged link between the HKD and the USD.
The hedge funds' mistake was a simple one. They forgot to take note of the news that Hong Kong had been handed back to China.
The hedge funds, led by Soros, had thought they could bully Hong Kong the same way they humbled Britain, and forgot all about China.
The Chinese Yuan was and is soft pegged to the USD, and unless the Chinese monied crowds say otherwise, the Yuan-USD peg will always endure, as long as the direction is on the down side (devaluation), because every nation can always to choose to debase their currency more than the next group of mobs.
China may not have been able to defend its currency against attack, had its currency been freely exchangeable, but defending Hong Kong would not have been a problem, especially since Hong Kong can more than adequately defend itself.
So, back to the topic of market vs. intervention. Intervention will lose, unless market says otherwise.
Chugs, Jay |
