The Financial Times ran a piece overnight canvassing potential US intervention to drive the USD down against the Chinese currency.
The background to this is
- strong, and stronger USD, despite the Fed's rate cut
- The US naming China as a currency manipulator
- USD/CNY and USD/CNH moving above what was though as a bit of a 'line in the sand' at 7 (wheter it is is/was or not remains to be seen)
- Plenty of chatter and speculation that the US admin could intervene to send the dollar lower
Via the FT:
- One senior staffer at a London-based Chinese bank said the US could conceivably intervene in the offshore renminbi market, where the currency is traded more freely than on the mainland. But the consequences could be serious.
- "If you take on China on the currency . . . it would be interpreted as a political act and it would throw markets into turmoil," said the senior staffer, speaking on condition of anonymity. The political fallout would be "unprecedented", the person added.
He says market turmoil likes that's a bad thing? :-D
(Off to the naughty corner for those thinking what I'm thinking!)
FT piece is here, may be gated
