tag:blogger.com,1999:blog-1528855306823771354.post1392923012259088752..comments2023-07-01T03:28:04.142+12:00Comments on Kiwi Trader: NZD Update, maybe a "freeze" trade looming?Kiwi Traderhttp://www.blogger.com/profile/18369785640717960444noreply@blogger.comBlogger2125tag:blogger.com,1999:blog-1528855306823771354.post-46133541991929571342009-02-18T21:32:00.000+13:002009-02-18T21:32:00.000+13:00Hi WalterThere is a growing risk of competitive de...Hi Walter<BR/><BR/>There is a growing risk of competitive devaluation looming. This is where currencies are allowed to weaken by their monetary authorities to help their export sector.<BR/><BR/>Big trading nations may begin to favour this. Just look at the comments on the GBP and the UK from the Europeans. Interestingly the US does not really care about the value of the USD. They use weasel words about strong USD but really as external trade is such a small part of the US economy, they don't sincerely care about the value of the USD.<BR/><BR/>The Chinese favour a weaker Yuan and there are rumours swirling that they may weaken the Yuan deliberately to help their exports restart. <BR/><BR/>The USD/weak/printing money/inflation argument you outline is perfectly valid.<BR/>But the market is not looking at that at all at this stage. <BR/><BR/>It may be next years story, but as yet, not a market moving factor.<BR/><BR/>Besides, the USD continues to strengthen against nearly everything, as funds still are going for the safety of the USD.<BR/><BR/>Maddening I know, but market sentiment is like that...see some of my earlier posts on the lack of logic in financial markets!!Kiwi Traderhttps://www.blogger.com/profile/18369785640717960444noreply@blogger.comtag:blogger.com,1999:blog-1528855306823771354.post-46276893104449942962009-02-08T03:01:00.000+13:002009-02-08T03:01:00.000+13:00KT, tell me if my thinking is too simplistic. Sel...KT, tell me if my thinking is too simplistic. Sell USD/Buy Renmibi because the Chinese will tire of buying US Treasuries that drop in price as money printing/borrowing grow in USA. They will also realize the wisdom of spending their hard earned export money/reserves on their own people in the form of domestic investment/consumption rather than USD investment. Plus, a stronger Yuan will reduce risk of inflation. I believe, many reasons to buy Renmibi in expectation of cataclysmic failure of USD and relatively stronger financial position of reserve heavy, debt-free china. <BR/>Walterwalterhttps://www.blogger.com/profile/06991793386113095002noreply@blogger.com