Today's devaluation of the Chinese currency seems to have had a big impact on the currencies of some of its trading partners - AUD, NZD, KRW have all been hit a fair bit. Again, I'm not an expert on currencies but looking at some of the movements I reckon there might be some opportunities going forward.
Crude will Fall very fast below 40$, Gold will also underperform, Chinese Yuan Devaluation as perfect decision. another side, DowJones, DAX, NSE etc. Going to underperform, DowJones target expected in 16100-16300 range Mid-Term.
Yeah this will make things interesting for the FED. From the US economy point of view, I think it's safe to raise their interest rates. But that would lead to a stronger dollar and that is already a problem... now even more with the devaluation of the yuan.
Yeah, I bet the Fed hadn't been factoring that one into their equation. That just shakes things up quite a lot potentially. We'll have to hear some noises out of the Fed to see how it's going to be viewed.
I don't see any benefit to China right now in having a strong currency. I feel as if the powers to be there are going to do whatever they can to keep it low and encourage exports. They have A LOT of people that they need to keep working, or they will have civil unrest on their hands. Question isn't will it go low, but how low will it go?
The Central Bank say it sees no reason for further devaluation, if you accept today's (Friday Aug 14) http://www.shanghaidaily.com/business/economy/Bank-No-reason-for-yuan-to-fall-further/shdaily.shtml coverage at face value. HTH. YMMV.
Unfortunately, they also said that the first devaluation was a "one-time" thing and it took them one day to break that rule. I'd be wary about listening too much to the central bank given their track record of an ability to surprise the market.
I think now, if EUR/USD got strong above 1.12 Pressure of Chinese devaluation will get reduced. It can Bring Correction in European Index, But, US markets will have Positive impact.
I guess China had ANOTHER bad day today and our stock market headed south (again) as a result. It's been a rough summer, between Greece and China. I hope we can limp along until we get a new president, hopefully someone who can turn our economy around so we can see some economic growth and some decline in our unbelievable amount of debt. sigh...
