-
The "Real Pain" Is About To Begin As Chinese Currency Slumps To 19-Month Lows
The PBOC's willingness to a) enter the global currency war (beggar thy neighbor), and b) 'allow' the Yuan to weaken and thus crush carry traders and leveraged 'hedgers' is about to get serious. The total size of the carry trades and hedges is hard to estimate but Deutsche believes it is around $500bn and as Morgan Stanley notes the ongoing weakness means things can get ugly fast as USDCNY crosses the crucial 6.25 level where losses from hedge products begin to surge. This is a critical level as it pre-dates Fed QE3 and BoJ QQE levels and these are pure levered derivative MtM losses - not a "well they will just ... (full story)
- Comments
- Comment
- Subscribe
- Comment #1
- Quote
- Apr 25, 2014 4:07am Apr 25, 2014 4:07am
- frx_trader
- Joined Jun 2012 | Status: Analyst | 3129 Comments
- Comment #2
- Quote
- Apr 25, 2014 4:10am Apr 25, 2014 4:10am
- frx_trader
- Joined Jun 2012 | Status: Analyst | 3129 Comments
- Comment #3
- Quote
- Apr 25, 2014 4:13am Apr 25, 2014 4:13am
- frx_trader
- Joined Jun 2012 | Status: Analyst | 3129 Comments
- Comment #4
- Quote
- Apr 25, 2014 4:15am Apr 25, 2014 4:15am
- Taffy
- | Joined Apr 2014 | Status: Member | 353 Comments
- Comment #5
- Quote
- Apr 25, 2014 4:20am Apr 25, 2014 4:20am
- frx_trader
- Joined Jun 2012 | Status: Analyst | 3129 Comments
- Comment #6
- Quote
- Apr 25, 2014 4:39am Apr 25, 2014 4:39am
- boon2
- | Membership Revoked | Joined Mar 2011 | 173 Comments
- Comment #7
- Quote
- Apr 25, 2014 4:49am Apr 25, 2014 4:49am
- barkie
- | Joined Mar 2014 | Status: Member | 1647 Comments
- Comment #8
- Quote
- Apr 25, 2014 5:02am Apr 25, 2014 5:02am
- boon2
- | Membership Revoked | Joined Mar 2011 | 173 Comments