Global Currency – Can the Chinese Yuan replace the US Dollar?
By John Robinson | January 4, 2010
The issue of global currency has dominated the currency market since the dollar collapsed a year ago. What does this mean in the current economic climate and forex market?
Though the argument seems exciting and appealing with shock value, but building a global currency requires time and supporting global financial institutions. China has less of these infrastructures on their side.
The U.S. dollar’s, (the global currency) hegemony is enshrined all over the world. This global leadership through a network of political and economic alliances can only be in Chinese dreams at the moment.
On the contrary, China has showed heavy savings rate, a strong current account position and a swollen manufacturing sector. What’s more, China has huge work force pool than any nation. The Chinese yuan unlike the dollar, doesn’t have yuan-based international financial structure like the IMF, World Bank, nor are there OPEC nations or major commodity producers pricing their products in yuan. This simple factor is enough to subvert the Chinese global currency idea.
For all its successes, the Chinese economy remains a budding shrub because it’s an export-oriented labor pool mostly catering to the increased profitability of Western companies. Free trade will eventually help China acquire its rightful place among the top powers of the world, but that doesn’t mean that the process will be fast or free of bumps and troubles.
Does this mean China can never dominate the global financial world? Of course not, but we believe the risks of that happening is rather small for the next decades. For example, many of us speculated about the eventual economic dominance of Japan over the West in the 80s, yet the result was in fact the opposite. There are possibilities that China may also have learnt from the economic failures of Japan but when the tide turns in US favor, will China still be pushing the global currency agenda?
Why not take advantage of the market situation trading yuan now?
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Dollar Fall Against Yen
By Benny Nardino | December 17, 2009
The USD, dollar falls sharply against the yen from 90.25 on overnight trades in Asian/Pacific session. Is this the end of the joy-ride or another consolidation for further push for tops?
Dollar falls
In the past couple of weeks, we have seen a nice trending market from the dollar yen after severe pressure from the gold market in the past few years. In spite of these challenges the dollar has held ground within the 84.79 and 101.43 range, channelling down slightly.
The Asian session saw the currency overwhelmed by news that FEDs were scaling back resources put into the market to sterm depression. The yen gained as dollar fall cuts below the psychologically threshold of 90 yen for the second time in two weeks. The pair is currently trading at 89.82 yen, after hitting low of 89.55 this morning, London trading session. Not long ago it was frown at to contemplate the dollar falling below 100 mark, but today its an optimists dream.
Ironically, against the euro and pound sterling the dollar did well by holding its grounds raising further concerns about the Euro-zone economic weakness as yesterday’s gains evaporated over night.
However, from our weekly chart we could see a turning tide in favor of the dollar as long-term sentiments indicates a dollar fight-back. If this is sustained in the New Year, further growth could be seen in the euro economy.
Share your opinions by commenting below. Thank you.
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GBP Free At Last
By Rox Sweetman | December 16, 2009
British pound sterling, GBPUSD finally breaks out of range that began in last week Thursday trading session causing a buying frenzy this morning. Is this a move that could cause us all singing, “Free at last, free at last Thank God Almighty, free at last?”
GBP Free At Last
The past five trading sessions have seen windless trading days with very little trend to hold on to. The day began at 1.6245 which later declined to 1.6229.
The morning sentiments began to change as the euro -zone reports began to trickle in causing a spike in the cable, pound sterling, GBPUSD pair. As the day unfold more and more it spelt further weakness for the dollar as current account debts widen.
Nonetheless, the day was saturated with a mixed-bag of news with something for everyone. From a trading standpoint, the pound sterling, GBPUSD market has since broken through the 6400 on the upside. It got most of our traders singing Hallelujah chorus as many made profitable gains from their open positions.
How did you do on the day? Share your thoughts.
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Choppy Euro Today
By Benny Nardino | November 17, 2009
LONDON: Choppy Euro trading remain today as EURUSD keeps range. But what’s keeping the boil on Traders, EU politicians and central bankers minds ticking is the euro surge.
Choppy Euro
A high-ranking E.U. delegation is now set to travel to China at the end of next week in a quest to persuade Chinese authorities to let their currency appreciate. Whether the Chinese would heed is another matter. As it is, it favors China’s export.
Trichet will join the party alongside the head of euro-zone finance ministers, Jean-Claude Juncker. German economist Reinhard Kudiss summed it up as an “.. act like a tax on exports”.
However, it’s no surprising. In recent weeks implied volatility expectations have dropped considerably from peaks. While this may not have resulted to intraday US Dollar price volatility slowdown but, markets remain extraordinarily choppy on a day-to-day basis as major currencies remain confined to choppy ranges.
Given the exceedingly low 1-week volatility expectations, we suspect that this may continue to be the case through near-term trading. Why not have your say? Use Comment form below.
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Interbank Exchange Rates Today
By Benny Nardino | September 9, 2009
Latest Previous %Chg Daily Daily %Chg
Dollar Rates 2150 GMT High Low 12/31
USD/JPY Yen 92.43-49 92.30-31 +0.14 92.50 92.25 +2.02
EUR/USD Euro 1.4497-01 1.4486-87 +0.08 1.4518 1.4482 +3.71
GBP/USD Sterling 1.6518-24 1.6490-93 +0.17 1.6565 1.6492 +12.94
USD/CHF Swiss Franc 1.0459-64 1.0466-69 -0.07 1.0472 1.0449 -1.97
USD/CAD Canadian Dlr 1.0778-81 1.0803-08 -0.23 1.0797 1.0760 -11.40
AUD/USD Australian Dlr 0.8592-96 0.8619-24 -0.31 0.8660 0.8585 +21.48
NZD/USD New Zealand Dlr 0.6955-58 0.6958-62 -0.04 0.6993 0.6951 +19.19
Euro Rates
EUR/JPY Yen 134.04-07 133.69-74 +0.26 134.23 133.65 +5.84
EUR/GBP Sterling 0.8775-79 0.8784-86 -0.10 0.8786 0.8760 -8.22
EUR/CHF Swiss Franc 1.5165-68 1.5163-66 +0.01 1.5172 1.5158 +1.56
EUR/CAD Canadian Dlr 1.5625-32 1.5650-60 -0.16 1.5647 1.5610 -8.19
EUR/AUD Australian Dlr 1.6865-76 1.6794-04 +0.42 1.6874 1.6760 -14.66
EUR/DKK Danish Krone 7.4434-36 7.4433-40 +.001 7.4441 7.4434 +0.01
EUR/NOK Norwegian Krone 8.5899-52 8.5714-35 +0.22 8.5967 8.5765 -11.52
EUR/SEK Swedish Krona 10.2024-74 10.2006-00 +0.02 10.2188 10.1857 -6.63
EUR/CZK Czech Koruna 25.4740-40 25.4660-60 +0.03 25.4990 25.4620 -4.78
EUR/HUF Hungary Forint 270.33-56 270.33-67 0.00 271.01 270.15 +2.57
EUR/PLN Polish Zloty 4.0995-15 4.0910-60 +0.21 4.1000 4.0820 -0.38
Yen Rates
AUD/JPY Australian Dlr 79.45-49 79.55-61 -0.13 79.99 79.23 +25.51
GBP/JPY Sterling 152.72-79 152.20-25 +0.34 153.01 152.24 +15.44
CAD/JPY Canadian Dlr 85.76-78 85.39-46 +0.43 85.90 85.49 +15.60
NZD/JPY New Zealand Dlr 64.30-34 64.23-28 +0.11 64.59 64.16 +23.06
Other Dollar Rates
USD/CZK Czech Koruna 17.558-88 17.578-08 -0.11 17.583 17.526 -8.14
USD/HUF Hungary Forint 186.31-76 186.71-92 -0.21 186.84 186.21 -1.06
USD/DKK Danish Krone 5.1336-46 5.1377-92 -0.08 5.1398 5.1279 -3.56
USD/NOK Norwegian Krone 5.9255-75 5.9170-50 +0.14 5.9350 5.9140 -14.68
USD/PLZ Polish Zloty 2.8270-00 2.8238-81 +0.11 2.8295 2.8116 -4.53
USD/RUB Russian Ruble 31.153-58 31.250-56 -0.31 31.383 31.064 +2.06
USD/SEK Swedish Krona 7.0378-93 7.0417-77 -0.06 7.0533 7.0240 -9.89
USD/EEK Estonia Kroon 10.7907-29 10.7973-35 -0.06 10.8034 10.7788 -3.51
USD/HKD Hong Kong Dlr 7.7502-04 7.7495-06 +0.01 7.7503 7.7502 +0.004
USD/MYR Malaysian Ringt 3.4925-55 3.5000-40 -0.21 3.4950 3.4885 +1.23
USD/INR Indian Rupee 48.4700-00 48.3000-00 +0.35 48.5800 48.2000 -0.23
USD/IDR Indones Rupiah 9920-930 9985-995 -0.65 9935 9915 -8.57
USD/PHP Philippine Peso 48.320-40 48.250-00 +0.15 48.420 48.220 +1.90
USD/SGD Singapore Dlr 1.4251-58 1.4260-71 -0.06 1.4265 1.4234 -0.36
USD/KRW S. Korean Won 1225.8-7.8 1223.0-5.0 +0.23 1228.8 1223.4 -2.87
USD/TWD Taiwan Dlr 32.687-00 32.650-90 +0.11 32.756 32.657 -0.21
USD/THB Thai Baht 33.99-05 34.01-05 -0.06 34.07 33.93 -2.07
USD/VND Vietnamese Dong 17829.00-00 17826.00-0 +0.02 +2.00
USD/ZAR S. African Rand 7.5418-68 7.5100-00 +0.42 7.5458 7.5255 -20.11
USD/BRR Brazilian Real 1.827-30 1.829-30 -0.11 Untraded today -21.01
USD/MXN Mexican Peso 13.350-72 13.342-67 +0.06 13.360 13.348 -2.22
USD/ARS Argentine Peso 3.8500-50 3.8500-50 0.00 Untraded today +11.59
Source: Thomson Reuters
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