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Strategies & Market Trends : China Warehouse- More Than Crockery
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To: RealMuLan who wrote (512)8/26/2003 10:48:11 PM
From: RealMuLan  Read Replies (1) of 6370
 
Reading China’s tea leaves

Aug 26th 2003
From The Economist Global Agenda

Will China float the yuan, revalue it up a bit, or neither?







FORECASTING exchange rates is rather like peering at tea leaves: many clever people get it wrong more than is the norm in financial markets, where the standard is high. The analogy is especially appropriate at the moment. Many pundits think it only a matter of time before China revalues its currency, the yuan, up; some even think it will let its currency float. Speculators (hedge funds and banks) are out in force. The reason has less to do with domestic considerations in China than with strong-arming from America, which thinks that the Middle Kingdom is competing unfairly by keeping its currency pegged low to the dollar, and is therefore flooding the world with cheap goods which exacerbate deflationary pressures. They make things a lot cheaper in China.

economist.com
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