The U.S. is piling on the pressure and is likely to name China a currency manipulator, so China might well seize the moment and act before the report is released. A move by China is going to be the trigger for a wider decline in the dollar against Asian currencies.
US equity market weakness has added a new dollar negative.
We're getting a bit nervous about being dollar bears. In the midst of hawkish rhetoric from the Fed and strong economic growth, there's a definite risk the dollar's momentum can push it further.
Over the next few weeks there's a very good chance that China is going to widen the band. Global policy makers have a new resolve to settle the issue of currency flexibility with China and they're prepared to have a show-down if necessary.
My brother was a grad student at Duke, and he gave me a Cameron Crazies shirt, so I thought I'd twist it up a little bit.
In the last couple of years, the U.S. has taken a tough line on China. The fact that they were able to make this agreement tells us that Europe and Japan have fallen into line with U.S. on this matter. That's a major turning point.
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