As we’ve already seen, China is very touchy about currency issues.
That doesn’t look like it will stop Chuck Schumer from rattling the Asian Tigers cage.
The US has been reluctant in the past to confront China too aggressively on the matter, seeing it as counter productive. That reluctance is breaking down however, with unemployment sky-high and the recovery unfolding at a very modest pace.
China does not like to be told what to do, and the market may fear retaliation, verbal at first, and possibly actual sales of US assets. Should be interesting days ahead, or it could just be a an empty threat from Schumer. He has made the same threat before. We shall see.
