Excerpt from: Forex Forecast
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| November 06, 2008 | | Barack Obama has already spoken out against yuan manipulation | It is no secret that the Chinese government manipulates the yuan, working to keep it low on the FX market so that its exports are advantaged. This policy, though, and U.S. President-Elect Barack Obama's opposition to it, may mean that the forex trading forecast may be calling for a clash of wills soon.
While the Chinese yuan is not available for individuals to trade on the currency market, the relationship between the yuan and other currencies can affect values on the forex market. And, there are currencies -- such as the South Korean won -- that are sometimes viewed as proxies for the Chinese currency.
In a letter to the National Council of Textile Oraganizations, Obama called for an end to yuan manipulation on Ocotber 24. However, China points to the fact that toy factories have gone out of business since yuan appreciation earlier this year, and that global recession is starting to take its toll.
Bloomberg reports on the possibility of a coming clash between the U.S. and China:
``China is facing a significant slowdown of its own,'' said
Donald Straszheim, Los Angeles-based vice chairman of Roth
Capital, a U.S. investment bank specializing in emerging markets.
``Beijing will stop currency appreciation for several more
months, and Washington won't like it.''
| Topic Tags: Barack Obama, Chinese yuan, currency manipulation, currency market, forex market, forex trading forecast, global recession, South Korean won | |
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