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CHINA is selling the dollar

  • #21
  • Nov 10, 2006 4:29am Nov 10, 2006 4:29am
Quoting Mr Trend
All I know is that I got killed today...
You went short GBPUSD/EURUSD?
GBPUSD reached 1.9171! Thats a 2006 high thus far.
I wonder if US session will sell USD or buy em back at cheaper cost?

I went long USDJPY myself @ 117.4.. then there is renewed dollar selloff at london session. good thing this did not move down too far.. but im here for the carry so I dont worry much.

I still could not get over myself for missing GBPJPY @ 224.05
  • #22
  • Nov 10, 2006 4:40am Nov 10, 2006 4:40am
yeah guys i saw the light on cable and got out before my losses got ugly... good thing too... not sure what time make of anything havent seen a healthy fib retracement in any of these pairs which is worrisome...
  • #23
  • Nov 10, 2006 4:42am Nov 10, 2006 4:42am
I believe it was also taken out of porportion, but u know buy the rumor been seeing lots of that lately... ;-)
  • #24
  • Nov 10, 2006 4:44am Nov 10, 2006 4:44am
Quoting NewstraderFX
It just goes to show how the fundamentals drive the markets...any word from china indicating they plan to "diversify" means they will sell their $'s.

Since they have so much-1 trillion at least-they obviously have tremdous power to move the market. On the other hand-they don't want to cause wholesale panic, because it makes their reserves that less valuable.

This does however fit into what Treasury sec Paulson would like to see-he's been calling for Yuan appreciation in the free market-one way for that to happen is by making the $ less valuable...not sure if this is exactly what Paulson had in mind, but the net effect is the same.
Good analysis NewstraderFX,

China has a goal of world trade dominance. They are now officially the second largest economic power in the world. They just blew Germany away into a distant third place.

They will keep their currency low to undermine all the other currencies and give them a strong trade advantage (read: Destroy the manufacturing industries of the West).

Some time ago, just after the Chinese govt-backed company Lenova bought IBM, I heard a rumour that their next big target was General Motors. (General Motors bonds are junk bonds. You could probably buy GM for the cost of its debts).

China wants industries where the intellectual property stays in the original country and they move all the manufacturing to China. Eventually, the IP will be absorbed and (eventually) moved back to China.

If you do a Google search you will find that GM and China have just done a deal to manufacture in China...GM doesn't even know that it is being eaten from the inside.
  • #25
  • Nov 10, 2006 4:45am Nov 10, 2006 4:45am
check out the pound... climb climb climb... i see i test of 9200 in the card... thats gonna kill alot of longer term short players with wide stops. protect your positions folks.. dont let ur losses snowball... out of control. and trade in the direction of the larger trend ie weekly daily which is up on both gbp and euro... just my 2 cents here.. on a very crazy week.
  • #26
  • Nov 10, 2006 5:21am Nov 10, 2006 5:21am
Hi, I guess most of you have heard of Rare Earth Elements. Used in the manufacture of all sorts of essential items including, medical scanners and satellites.

97% of the world's annual production of REE's come from, yes you've guessed it China.

A decade or so ago they slashed the price and pushed every other mine out of production, including a big one in USA.....forgotten the name for the moment.

Recently they announced

1) an enormous export price rise

2) A cut back in production....citing environmental concerns...they're kidding!!

3) that they were going to be a lot more selective who they sold the reduced amounts to, reserving the majority for the use of their own manufacturers.

Just one example that they are playing a deep, long term game, for keeps, no holds barred. They have very long memories and have some very big scores to settle with the west, from oh say 100 to 200 years ago. I kid you not!!

The 21st century belongs to the Chinese and they will do whatever they see necessary to win the long term game.

If that includes dumping the $ then that's what they'll do. When they're ready, but I'm positive they won't announce it to the world before hand.

We've seen this type of announcement before and the retraction the next day. Standard practice. Short term manouvering. Sucker punch, just watch out for the left hook coming on the blind side.

All in my opinion, do your own research, no advice given etc
  • #27
  • Nov 10, 2006 5:34am Nov 10, 2006 5:34am
check this news post...

[FOCUS COMMENT: BANGED TO RIGHTS] Despite all the talk of Chinese FX reserve diversification, the latest Fed custody data shows another build up in Dollar assets held by foreign central banks. For the third week in a row, week avg balances rose to give a cumulative rise of Usd 10 bn, and over double this on the more volatile week end balance.
  • #28
  • Nov 10, 2006 5:47am Nov 10, 2006 5:47am
Quoting jami dodgers
We've seen this type of announcement before and the retraction the next day. Standard practice. Short term manouvering. Sucker punch, just watch out for the left hook coming on the blind side.
Thats why I'd rather stay away trading EURUSD or GBPUSD... I went for USDJPY instead...

A lot were probably moved to short the USD just when it hit the high 9175... look where USD is now...

Play smart.. dont be fooled with the uptrend. it is already TOO LATE to go long... it MAY PROBABLY go higher... I'd rather dont earn a pip on it than be fooled and loose a big. I'd personally SHORT it at 9175 if I manage to watch it climb back again.. Statistically, highs dont stay too long GBPUSD..


PS. There are big sellers parked before 9200.. These are OPTION houses and you know they will protect their money! Ever wondered why when all the USD bullishness and NKorea's Nuke threat and JPY bearishness, USDJPY never broke 120? OPTION downplayed this pair.. I'd expect the same with GBPUSD.
  • #29
  • Nov 10, 2006 6:15am Nov 10, 2006 6:15am
Quoting BurgerKing
BTW, what happened to FF earlier? I could not access FF for several hours and was redirected to some website instead.... what happened?
It was a big server upgrade... Isn't it nice?? I like the speed. I have 3meg connetion and this really screams...
  • #30
  • Nov 10, 2006 6:20am Nov 10, 2006 6:20am
burger I agree nothing grows to the sky except these carry trades and even those are subject to pullbacks... but def good advice, everything retraces sooner or later. Thanks
  • #31
  • Nov 10, 2006 6:23am Nov 10, 2006 6:23am
...or diversification without actual diversification:

Central banks hold a mixed basket of currencies. If the $ depreciates, the value of their non-$ holdings goes up and the value of their $ holdings goes down, and so the % of the basket is $ changes. This valuation effect is small but becomes meaningful over time.
"Always bet on black"
  • #32
  • Nov 10, 2006 6:43am Nov 10, 2006 6:43am
Guys heads up today,,,

news item... the china syndrome continues...

NORTH AMERICA FX OPEN] The Usd remains under pressure following PBOC Governor Zhou's diversification remains, and his participation at an ECB conference (13.45GMT) will be eagerly eyed for more substance or clarification. The Fed's Bernanke, BoJ's Iwata and Fukui plus the ECB's Trichet are also slated to speak in a panel discussion.
  • #33
  • Nov 10, 2006 7:44am Nov 10, 2006 7:44am
Ya know I shorted the Dollar/Yen yesterday as soon as the china statement hit the wire @ 118.17. I jumped out for a 17 pipper and was quite pleased with myself for capitalizing on the news

It just never occurred to me at the time that it would spark such a nice move.

It reminds me of one of my favorite old songs: stealin' when I shoulda' been buyin'

Bet nobody can tell me what group that was. And bonus points if you can tell me the singer
Profit is where readiness meets Opportunity
  • #34
  • Nov 10, 2006 8:46am Nov 10, 2006 8:46am
Quoting FXopportunist
Ya know I shorted the Dollar/Yen yesterday as soon as the china statement hit the wire @ 118.17. I jumped out for a 17 pipper and was quite pleased with myself for capitalizing on the news
Yesterday you said you made 16 pips! Did you earn some interest overnight? :
  • #35
  • Nov 10, 2006 8:51am Nov 10, 2006 8:51am
Quoting philmcgrew
Yesterday you said you made 16 pips! Did you earn some interest overnight? :
No, I read yesterday's report.
Profit is where readiness meets Opportunity
  • #36
  • Nov 10, 2006 9:03am Nov 10, 2006 9:03am
imho, the dollar has went too deep. I believe that China's announcement of diversification is just a warning, after all, if you were to really dump all your US dollars, would you announce it to the world so that they can push the US dollars even lower and dump your stash at a lower price? The dollar is too weak, I believe a reversal will come, either that, or a big rally. I'm a believer in the dollar's weakness, however, it wont just go down like this, at least not without a fight.

Having said that, I'm still out of the markets in the meantime. It's way too unpredictable. TA does not work for me in this kind of market.
  • #37
  • Nov 10, 2006 9:09am Nov 10, 2006 9:09am
Quoting JodyOng
imho, the dollar has went too deep. I believe that China's announcement of diversification is just a warning, after all, if you were to really dump all your US dollars, would you announce it to the world so that they can push the US dollars even lower and dump your stash at a lower price? The dollar is too weak, I believe a reversal will come, either that, or a big rally. I'm a believer in the dollar's weakness, however, it wont just go down like this, at least not without a fight.

Having said that, I'm still out of the markets in the meantime. It's way too unpredictable. TA does not work for me in this kind of market.

A very very good point. Would not be very shrewed would it?
Profit is where readiness meets Opportunity
  • #38
  • Nov 10, 2006 9:57am Nov 10, 2006 9:57am
Quote
10-11-06 16:54 - FRANKFURT, Nov 10 (Reuters) - China has no new plans to sell
any foreign exchange currencies from its reserves, Chinese
central bank governor Zhou Xiaochuan said on Friday.
"We do not have any new preparations for selling any
currencies," Zhou said on the sidelines of a monetary policy
conference here when he was asked if he planned to sell U.S.
dollars.
He had said a day earlier that China had a clear plan to
diversify its FX reserves and is considering various options to
do so.

End of Rumors...
  • #39
  • Nov 10, 2006 10:03am Nov 10, 2006 10:03am
lol...
  • #40
  • Nov 10, 2006 10:23am Nov 10, 2006 10:23am
1 more...

Latest comments from [PBOC GOVERNOR ZHOU] may reinforce an appetite to book profits on Usd shorts as US players drift off early ahead of the Veterans Day holiday, by saying China does not have any new preparations for selling currencies. His earlier comments on diversification appear to relate to the destination of new funds, rather than outright Usd sales, but do imply reduced flows into the US in the future. Eur/Usd bids are reported to be in place at 1.2840, with sizeable stops under 1.2800. Given that the market is reported to have been eager to test the upside in the pair even prior to Zhou's initial comments, the latter will probably remain safe before another probe towards the 1.2940 Sep and 1.2980 year's highs. Note Asian central banks were, though, sellers above 1.2865 earlier
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