Everyone is talking about the possibility of China raising interest rates. What if they did? How could it impact currencies?
In October, the PBoC surprised everyone by raising interest rates for the first time since 2007. At that time, we said the central bank rarely makes one off changes and we believe [...]

Posted in china, chinese yuan, forex blog 3 Comments »

I was on the Business News Network this morning talking about my reaction to the Australian rate hike, the IMF’s report on Chinese Yuan undervaluation and my outlook for the Canadian rate decision
Click on image to access the video

Posted in 2009 canadian dollar, Australian Dollar, Bank of Canada, australian dollar forecast, china, chinese yuan No Comments »

The Financial Times carried a long article yesterday by Peter Garnham on the fears for the future of the dollar carry trade. The key takeaway from the article is that China estimates the dollar carry trade to be $1.5 trillion compared to an $1 trillion that was put into the Yen carry trade (the [...]

Posted in china, dollar carry trade 1 Comment »

Here is a very well written article about China’s predicament with the U.S. dollar and explains why they won’t be talking down the dollar anytime soon:
From the Weekly Standard
The Dollar’s New Best Friend
Beijing warms up to the greenback–because it has to.
by Gordon G. Chang
Last Tuesday, Brazil, Russia, India, and China–the so-called BRIC nations–met in Yekaterinburg, [...]

Posted in china, chinese yuan, forex blog 4 Comments »

According to the latest data from Treasury, foreign investors were net sellers of U.S. dollars. The Madoff scandal led to a tremendous amount of liquidation by hedge funds in the Caribbean and Luxembourg but we have our eye on China. The Asian Giant continues to be a net buyer of dollar denominated investments, albeit [...]

Posted in china, chinese yuan, forex blog 3 Comments »