Trends in FX
What Happens to Currencies If China Revalues? |
Japan competes vigorously against China in many export markets. Therefore, if China does revalue the Yuan, and if as expected the Yuan rises in value, Japanese products will instantly become cheaper vis a vis their Chinese counterparts. This increased competitiveness is expected to expand Japanese exports and benefit the yen against both the euro and the dollar. European officials expressed a strong displeasure at the fact that euro has absorbed most of the recent dollar weakness while the Asian currencies have remained steady. News of Yuan revaluation is likely to change that dynamic by attracting more capital flows to Asia which would cause EUR/JPY to decline. Note the quick market reaction to the surprise Bank of China rate hike announcement last October: many market participants believed this to be the first signal in the Yuan revaluation process. Should People’s Bank of China actually revalue the Yuan, the downward impact on the EUR/JPY is likely to be far more lasting.
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 What happens to currencies if oil goes to $60?
- The Canadian Dollar will rise
- The Canadian Dollar will fall
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What happens to currencies if Gold goes to $500?
- The Swiss Franc will rise
- The Swiss Franc will fall
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What happens to currencies if the 10-year bond goes to 6%?
- The US Dollar will rise
- The US Dollar will fall
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What happens to currencies if the stock market falls 10%?
- The US Dollar will rise
- The US Dollar will fall
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What happens to currencies if social security get privatized?
- The US Dollar will rise
- The US Dollar will fall
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