AM 1150 Kelowna - Radio Rallies & Reversals
Well the big news this weekend was the decision by China to allow its currency to float against the US$. On the news, global stock market indices rallied and the Yuan rallied half a percent overnight.
So why now? The Chinese have certainly been under a lot of pressure to float their currency, increasingly in advance of the G-20 summit to be held in Toronto starting this Friday. The thinking is, by allowing the Yuan to float, this will empower Chinese consumers who will then take their place a top the consumption food chain as western consumers continue to choke on all the debt they've been shoveling in this past decade. From the Chinese viewpoint, however, by allowing the Yuan to appreciate, this may help with their inflation problem. I'll have more to say this afternoon.
So why now? The Chinese have certainly been under a lot of pressure to float their currency, increasingly in advance of the G-20 summit to be held in Toronto starting this Friday. The thinking is, by allowing the Yuan to float, this will empower Chinese consumers who will then take their place a top the consumption food chain as western consumers continue to choke on all the debt they've been shoveling in this past decade. From the Chinese viewpoint, however, by allowing the Yuan to appreciate, this may help with their inflation problem. I'll have more to say this afternoon.
Labels: The First Hour
posted by Gordon Bell at
6:49 AM
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