The Next 'Peg' to Fall?
This would make the Swiss Franc Debacle Look Like Noise!
If you were the Chinese what would you do?
This has got to really p$%^ss off the Chinese!
Its Actually a USD-YUAN PROBLEM!!!
The drop in the Yuan over the past 2 days is the largest against the US Dollar since Nov 2008 as USDCNY nears its highest (CNY weakest) since mid-2012. What is more critical is that for the first time since the new 2% CNY peg bands, USDCNY is trading at the extremes - 11.5 handles cheap to the fix. At the opposite end of the spectrum, the EURCNY just dropped below 7.00 for the first time since June 2001 with the biggest 2-day strengthening of the Chinese currency against the Euro in almost 4 years. It appears the consequences of ECB QE, SNB volatility, and now Greek concerns continue to ripple through the rest of the world.. and at a time when China faces its ubiquitous new year liquidity squeeze, that is not a good sign.
Biggest 2-day drop in the Yuan against the US Dollar since 2008
With USDNCY pushing against its 2% peg band for the first time...
As the Yuan shifts to its strongest against the Euro since 2001 (almost 2000) - back below 7.000