China signs currency swap worth 150 billion yuan with Switzerland

Discussion in 'General Trading Discussion' started by Casper, Jul 24, 2014.

  1. Casper

    Casper Well-Known Member

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    China positions itself and signs currency swap worth 150 billion yuan with Switzerland

    http://www.reuters.com/article/2014/07/21/us-china-switzerland-currency-idUSKBN0FQ0H520140721

     
  2. Gelsemium

    Gelsemium Senior Investor

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    What a huge deal! China is the biggest country in the world and they will most likely be soon the biggest economy as well.
     
  3. Profit5500

    Profit5500 Senior Investor

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    With that in mind China is already moving to be an effective global economy. With the US relying on receiving most of its goods from China I am not surprised China got a $24.17 billion dollars from Swiss Central Bank. That means they are going to have some interesting trades from time to time. I don't how low the trade risks would be but have to keep my eye on them.
     
  4. owesem75

    owesem75 Well-Known Member

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    Does this mean we have to now consider opening a REMNIBI ACCOUNT??
     
  5. Fredrick Jones

    Fredrick Jones Well-Known Member

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    China is postioning itself as a direct competitor to the Euro and US dollar. Not good news for either USA or Europe.
     
  6. petesede

    petesede Guest

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    It is wishful thinking. $24B is nothing.. this is basically a PR stunt by China, nothing more.

    90% of the countries in the world you can go to a small village in the middle of nowhere and use US dollars. Everyone accepts it, everyone knows the daily conversion rate from their local currency etc. I would guess that almost nobody knows the name of the currency in China, let alone it´s conversion rate to the USD or their own local currency. I live in a little third world country that has horrible relations with the US, and still you MUST use the USD for almost any large purchase or financial agreement. You rent a house, the contract is in USD, you want to get a driver´s license.. USD.

    One of the things that surprises me the most from my travels is how entrenched the USD is in local economies, even with countries that don´t even like us very much. I use USD everywhere where I live, to buy gas, groceries, a coke at the corner store, I pay my rent in USD. My guess nobody here was ever even seen the chinese currency.
     
  7. Rainman

    Rainman Senior Investor

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    The East is trying all they can to stop using the dollar. I think what emboldens China is the fact that along with Russia and China they've struck a deal that will see them in the near future ditch using the dollar for foreign trade transactions [at least that's amongst them, I suppose]. I'm sure it will take a really long time for many countries to embrace the usage of other currencies.
     
  8. petesede

    petesede Guest

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    it is a very small amount, and in order for it to matter at all, it would have to be a signficantly larger amount, at which point the participating countries both are risking their currency slipping compared to the USD. If two countries trade in a currency besides the US dollar, then either country can take a huge loss by the tiniest slip in their ´receiving´currency compared to the USD. In order for those types of transaction to take place, BOTH countries would have to be willing to accept that risk.
     
  9. queenbellevue

    queenbellevue Well-Known Member

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    I've been thinking about investing in some Chinese Yuan recently but now I'm wondering if I should pull the trigger or not. This MIGHT spike the price up really high then come straight back down. What do you guys think?
     
  10. petesede

    petesede Guest

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    Just me personally, I don´t mess with investing in currencies because it takes a LOT of capital to make any money, they go up a fraction of a % and then quickly stabilize. It either takes a lot of capital to make money, or you need to make a lucky guess on an upcoming crisis ( ie Russia). I would be much more likely to bet in a currency crashing rather than invest in someone gaining.
     

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