User Name: Password:      Register - Lost password?

Forex News Blog
Back to The Headlines
Tuesday May 10, 2005 - 10:57:48 GMT
Black Swan Capital -

Share This Story:
| | Email

More to "revaluation" than meets the eye


“I interpret financial markets as a historical process. I believe my interpretation also has some relevance to history at large—by which I mean not only the history of the human race, but all forms of human interaction. People act on the basis of imperfect understanding and their interaction with each other is reflexive.”

George Soros, The Crisis of Global Capitalism

FX Trading

You have to wonder what the politicos are thinking. Let’s say you own a cabinet making shop. You pay your workers $0.40 per hour to build cabinets. I own a competing shop down the block, and I pay my workers $6.00 per hour to do the same job. But the local politician says that it’s unfair competition for you to pay your workers just $0.40 per hour. So, he says in order to make it fair, you should raise your workers salaries by at least 40%. So, you relent and pay them $0.56 per hour. Now, the local politician feels good and can tell his constituents he just leveled the playing field—no more unfair competition on his watch. Does this sound familiar?

How on earth is a Chinese revaluation of 20% or even 40% [and it’s highly unlikely we see a revaluation of that magnitude, if we see one at all] going to level the playing field in terms of trade? I am no economist, but on the outside looking in, those numbers just don’t add up to much. Yet the politicos would have us believe it to be so.

But what is interesting is that a revaluation of that size could change the terms of trade for China vis-à-vis its other slave labor nation competitors.

This is from a piece by Stephen Jen, at Morgan Stanley:

“I believe the RMB is modestly under-valued both in index terms and against the USD. Moreover, the popular guesstimates in the 40% range are too high. I also doubt revaluation will contribute to normalisation of global imbalances. Global imbalances reflect disparate savings-investment (S-I) imbalances in the world, and the process of globalisation, not exchange rates. Previously, I have stressed the low price elasticities of trade demand for the US, and the price substitutability of goods produced in China and other emerging economies. If an RMB revaluation shifts production from China to other not-so-low-cost emerging markets, the US C/A deficit could deteriorate further!” [My emphasis]

Can you just imagine it! The law of unintended consequences kicking into play when politicians rear up on their hind legs to solve a problem!

Mr. Jen doesn’t believe China has manipulated its currency for trade gains—he believes the huge foreign exchange reserve balance is because of hot money pouring into China.

And I believe most people would agree that much of the hot money flowing to China is precisely because the people on the other end of the flow believe China’s currency is 20-40% undervalued and they will see a revaluation of that magnitude. But, ask yourself this, what happens if China decides to wait another year or two before revaluing? Or what if it does the deed and it turns out the much awaited revaluation is miniscule relative to expectations? I would imagine that the hot money people would be disappointed.

Mr. Jen cites an IMF study: “They [IMF] found that close to 75% of the change in capital flows came from categories of flows sensitive to market expectations on the future trend of USD/RMB, rather than the underlying fundamentals, i.e., without ‘speculative’ inflows, China’s reserves would have been US$455 billion at end-2004, rather than US$609 billion.” [My emphasis]

That’s $154 billion in hot money flow. If that goes the other way—I would imagine it would have a significant negative impact on a Chinese economy [global growth engine #2 of 2 besides the US] in need of funds to keep the music playing—and it would probably be a little boost for the buck!

So, as we’ve been told before: Be careful what you wish for, it may come true.

Jack Crooks


Forex Trading News

Forex Research

Daily Forex Market News
Forex news reports can be found on the forex research headlines page below. Here you will find real-time forex market news reports provided by respected contributors of currency trading information. Daily forex market news, weekly forex research and monthly forex news features can be found here.

Forex News
Real-time forex market news reports and features providing other currency trading information can be accessed by clicking on any of the headlines below. At the top of the forex blog page you will find the latest forex trading information. Scroll down the page if you are looking for less recent currency trading information. Scroll to the bottom of fx blog headlines and click on the link for past reports on forex. Currency world news reports from previous years can be found on the left sidebar under "FX Archives."

Actionable trading levels delivered to YOUR charts in real-time.

Register To Test Your Amazing Trader

GVI Trading. Potential Price Risk Scale
AA: Major, A: High, B: Medium

Tue 17 July 2018
AA 08:30 GB- Employment
A 13:15 US- Industrial Production
AA 14:00 US-Powell Testimony
Wed 18 July 2018
AA 08:30 GB- CPI
A 12:30 US- Housing Starts/Permits
AA 14:00 US-Powell Testimony
Thu 19 July 2018
AA 1:30 AU- Employment
AA 08:30 GB- Retail Sales
A 14:30 US- EIA Crude
A 12:30 US- Weekly Jobless
Fri 20 Jun 2018
A 12:30 CA- CPI/Retail Sales

John M. Bland, MBA
co-founding Partner,

Global-View Affiliate Program

We are starting an affiliate program to market some of our products.

Send me an email if you would be interested or if you know someone who would like to be an affiliate. Generous commissions payout for those accepted.

Put the word "affiliate" in the email subject line.

Contact us

Start trading with forex broker Markets Cube

Max McKegg's Daily Forex Trading Forecasts

Veteran FX Trader, Max McKegg, forecasts all the Major currencies and the Australasians; providing Daily and Medium Term Trading forecasts to subscribers, who include large Banks the world over, as well as individual traders in more than 30 different countries.

Request a TRIAL of Max's Forex Service.


Retail Forex Brokerage Changing!

Are you looking for your first broker or do you need of a new one? There are more critical things to consider than you might have thought.

We were trading long before there were online brokers. Global-View has been directly involved with the industry since its infancy. We've seen everything and are up-to-data with recent regulatory changes.

Our Best Brokers listing section includes:Forex Broker Reviews, Forex Broker Directory, Forex Broker Comparisons and advice on How to Choose a Forex Broker

If would like guidance, advice, or have any concerns at all ASK US. We are here to help you.

SEE Our Best Brokers List

Currency Trading Tools

  • Live rates, currency news, fx charts. 

  • Research reports and currency forecasts.

  • Foreign Exchange database and history.

  • Weekly economic calendar.

Directory of  Forex trading tools

Terms of Use    Disclaimer    Privacy Policy    Contact    Site Map

Forex Forum
Forex Trading Forum
Forex Forum + forex rates
Forex Forum Archives
Forex Forum RSS
Free Registration

Trading Forums
Currency Forum Guide
Forum Directory
Open Forum
Futures Forum
Political Forum
Forex Brokers
Compare Forex Brokers
Forex Broker News
Forex Broker Hotline

Online Forex Trading
Forex Trading Tools
Currency Trading Tools
Forex Database
FX Chart Points
Risk/Carry Trade Chart Points
Economic Calendar
Quicklinks to Economic Data
Currency Futures Swaps
Fibonacci Calculator
Currency Futures Calculator

Forex Education
Forex Learning Center
FX Trading Basics Course
Forex Trading Course
Forex Trading Handbook

Forex Analysis
Forex Forecasts
Interest Rate Forecasts
Central Bank Forecasts

FX Charts and Quotes
Live FX Rates
Live Global Market Quotes
Live Forex Charts
US Dollar Index Chart
Global Chart Gallery
Daily Market Tracker
Forex News
Forex Blog
Forex News
Forex Blog Archives
Forex News RSS
Forex Services
Forex Products
GVI Forex
Free Trials
FX Bookstore
FX Jobs and Careers
Jobs USA
Jobs UK
Jobs Canada

Forex Forum

The Global-View Forex Forum is the hub for currency trading on the web. Founded in 1996, it was the original forex forum and is still the place where forex traders around the globe come 24/7 looking for currency trading ideas, breaking forex news, fx trading rumors, fx flows and more. This is where you can find a full suite of forex trading tools, including a complete fx database, forex chart points, live currency rates, and live fx charts. In addition, there is a forex brokers directory where you can compare forex brokers. There is also a forex brokers hotline where you can ask for help choosing a forex broker that meets your individual fx trading needs. Interact on the same venue to discuss forex trading.

Forex News

The forex forum is where traders come to discuss the forex market. It is one of the few places where forex traders of all levels of experience, from novice to professionals, interact on the same venue to discuss forex trading. There is also the GVI Forex, which is a private subscription service where professional and experienced currency traders meet in a private forex forum. it is like a virtual forex trading room. This is open to forex traders of all levels of experience to view but only experienced currency tradingprofessionals can post.

Currency Trading

Currency trading charts are updated daily using the forex trading ranges posted in the Global-View forex database. You will also find technical indicators on the fx trading charts, e.g. moving averages for currencies such as the EURUSD. This is another forex trading tool provided by

Forex Brokers

The forex database can be used to access high, low, close daily forex ranges for key currency pairs, such as the EURUSD, USDJPY, USDCHF, GBPUSD, USDCAD, AUD, NZD and major crosses, including EURJPY, EURGBP, EURCHF, GBPJPY, GBPCHF and CHFJPY. Data for these currency trading pairs dating back to January 1, 1999 can be downloaded to an Excel spreadsheet.

Forex Trading

Forex chart points are in a currency trading table that includes; latest fx tradinghigh-low-close range, Bollinger Bands, Fibonacci retracement levels, daily forex pivot points support and resistance levels, average daily forex range, MACD for the different currency trading pairs. You can look on the forex forum for updates when one of the fx trading tools is updated.

FX Trading

Global-View also offers a full fx trading chart gallery that includes fx pairs, such as the EURUSD, commodities, stocks and bonds. In a fx trading world where markets are integrated, the chart gallery is a valuable trading tool. Look for updates on the Forex Forum when the chart gallery is updated.

Forex Blog also offers a forex blog, where articles of interest for currency trading are posted throughout the day. The forex blog articles come from outside sources, including forex brokers research as well as from the professionals at This forex blog includes the Daily Forex View, Market Chatter and technical forex blog updates. In additional to its real time forex forum, there are also Member Forums available for more in depth forex trading discussions.



By using this website, you are agreeing to our Privacy Policy and Terms of Use, and Cookie Policy

Copyright ©1996-2014 Global-View. All Rights Reserved.
Hosting and Development by Blue 105