Dollar printing is feeding inflation in China: minister
BEIJING: Rampant issuance of dollars by the United States is saddling China with “imported inflation”, Chinese commerce minister Chen Deming was quoted as saying by state media on Wednesday.
“Given the current situation, companies have thought ahead and prepared for exchange rate fluctuations as well as an increase in labour costs,” Chen said, according to the state-run China Business News.
“But because the issuance of dollars is out of control, and international commodities prices are continuing to rise, China is confronted with imported inflation, which has created major uncertainties for businesses,” he said.
The comments came ahead of a meeting of the US Federal Reserve next week at which the central bank is expected to announce additional stimulus measures.
While critics in the United States accuse China of artificially undervaluing its currency to give exporters an unfair advantage, Beijing says Washington is foisting its economic woes on the rest of the world by printing more money.
Beijing pledged in June to let the yuan trade more freely and the currency has since strengthened slightly, but US and European policymakers say it could be undervalued by as much as 40 per cent.
At the weekend, Group of 20 finance ministers meeting in South Korea pledged to “refrain from competitive devaluation of currencies” and aim for “more market-determined exchange rate systems”.
Jittery financial markets were looking for a strong stand from G20 members against beggar-thy-neighbour currency policies, in the leadup to a November 11-12 summit in Seoul.
Chinese Finance Minister Xie Xuren urged “major reserve currency countries to take responsible economic policies”, with the dollar sliding on expectations that the Federal Reserve would launch even bolder monetary easing.
China’s central bank on Wednesday set the central parity rate at 6.6912, weaker than the 6.6762 on Tuesday. The yuan can trade up or down 0.5 per cent from that mark. – AFP
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The Significance of Forex Funds For The Average Investor
The notion of many when it comes to the foreign exchange market is that it is a realm exclusive for big time investors. Developments in recent years, particularly with the rise of forex funds, have brought the high yield investment characteristics of the forex market closer to the average citizen.
As knowledge and competence about forex trading and the global foreign exchange market in general becomes easily accessible through the advancement of Internet technologies, it begs the question – should the average investor get into foreign exchange investment opportunities?
Undoubtedly, forex funds are high yield investment instruments. Compared to traditional investments, foreign exchange trading tends to provide considerably greater returns. This holds true for all forms of forex market instruments including Spot Forex, Currency Futures, FX Option, Forex Swaps and currency-based Exchange-Traded Funds.
The average citizen however are less exposed to high return investment products and are largely able to access only common conservative investments such as bank deposits and bonds. For most people high yield investments like mutual funds and hedge funds are by and large too strange, too costly in terms of required capital and much too risky. Indeed high yield equates to high risks in the world of investments.
Nevertheless, more often than not, high yield investment opportunities create the wealth for investors rather than the average bank deposits and bond instruments. Commercial low yield investment products usually return anywhere from 1% up to 8% only. In contrast, it is not uncommon for high return investment instruments to yield double digit percentages of returns. High performing forex funds for example may average at 15% and may reach up to more than 30%.
This greater rate of return is enough to motivate novice and small-time investors all over the world to include foreign exchange funds as part of their investment portfolio. Apart from its global accessibility, these funds present a unique advantage over other high return financial instruments. Usually, these forex investments require minimal capital investment.
There are forex funds that can get an investor started at US$200. There are even a few funds that welcome amounts as small as US$50 for beginning accounts. Of course the high yields are more obvious with higher account levels which may require capital of about US$2,000 or more.
While the performance of these foreign exchange investments can be truly encouraging even during these tough economic times, still the risks associated with big investments remain. As such, only surplus or risk capital should be placed into high yield investments.
That said, forex funds are ideal stepping stones for the average investor to diversify and include high yield investments to their financial portfolios. Many people around the world are doing just that. Whereas twenty years ago the global forex market volume was only about US$500 billion, in recent years the daily turnover volume has been estimated to be over US$3 trillion.
One factor that can be attributed to this enormous growth in the foreign exchange market is the increased participation of a huge number of new and small investors as well as seasoned investors through forex funds and other similar forex investments powered by technologies on the World Wide Web. This also shows that getting into foreign exchange investments, while carrying high risks, are also highly profitable and should be considered with care by long time and aspiring investors.
Forex Technical Update 11/5/2010 – Japanese Yen Shows Vulnerability after BoJ Meeting
Traders in the forex market went through a lot of event risks this week, and finally have passed the finale in the Bank of Japan meeting and US Non-Farm Payroll. There may be something developing in the Japanese Yen as there is no continuation of Japanese strength after these events. We may be setting up for a reversal and a cycle of weakness.
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US Dollar Forecast Turns Bearish on Fed Actions, S&P 500 Rallies
The highly-anticipated Federal Open Market Committee interest rate announcement sent the US Dollar reeling against the Euro and other key currencies, and the sharp break suggests the Greenback may continue to drop through upcoming trade. For weeks now we have argued that the USD’s fate may depend on the FOMC’s subsequent actions.
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Daily Forex Summary on US Dollar, Euro, Sterling, Japanese Yen, Canadian Dollar, Aussie Dollar and New Zealand Dollar
The US dollar dipped to an 11-month low against a currency basket after the US Federal Reserve launched its second wave of quantitative easing yesterday which led investors to seek higher-yielding currencies. The Federal Reserve committed to buy $600 billion in government bonds by Q2 2011 in efforts to support the struggling US economy on Wednesday.
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Price of oil hits six-month high
The price of oil hits a six-month high after strong manufacturing data in the US and China boosts confidence in the global recovery.
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Fed Needs to Change Investor Perception to Help Facilitate Legitimate Recovery
A solid trading day for the Buck on Wednesday is being compromised in early Thursday trade, with the Greenback well offered in Asian trade and into the European open. The Aussie and Euro are the biggest gainers on the day, with both currencies recovering about half of their losses from the previous day. Meanwhile, all other major currencies are also tracking higher against the US Dollar.
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Qualcomm in talks to exit India broadband: Report
US-based mobile chip supplier Qualcomm is looking to sell its wireless broadband business in India for a minimum of 50 billion rupees, the Economic Times reported today.
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Geithner heads to China with forex demand
US Treasury Secretary Timothy Geithner was to head to China on Sunday bearing a demand for emerging economies to let their currencies appreciate, following fractious G20 talks in South Korea.
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Daily strategy 22-10-10 – Mind the gap
Global currency policies will remain in focus and a more substantive US pledge to support a firm US currency would boost the greenback following the G20 meeting. More generalised comments look likely with an agreement that undervalued currencies should appreciate.
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