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Ok, this is really interesting, the Yuan (CNY) has officially become one of the 5 mayor reserve currencies (USD, EUR, CNY, JPY & GBP), since the IMF added it to

by Aldo_MX 10y ago

Ok, this is really interesting, the Yuan (CNY) has officially become one of the 5 mayor reserve currencies (USD, EUR, CNY, JPY & GBP), since the IMF added it to the SDR basket today. The following month will be the American elections and I expect the Brexit effect to repeat with the US Dollar after the result gets announced, since the average Joe will certainly vote for the candidate who proposed the less global-friendly economic policies. Will the Yuan have a chance to benefit from the post-election speculative chaos?

Kenji 10y ago
Both the Brexit effect and the speculative chaos you propose are very short term. The fluctuations do not correspond in any way to the performance of the state and economy backing these currencies. Therefore, I think that if it benefits CNY, then only for a short timespan. However, if the US really tightens the screws on international trade, it will suffer longterm and so will its currency. (And yes, I find the prospect of closed markets, increased tariffs and the like dreadful. There is no reason for the US to do that. This is different from Brexit though, since the EU conditions free movement of people and huge bodies of law on the trade agreements. A post-Brexit Britain may have more free trade than ever before since it can do its own agreements with any country - like any sovereign nation should.)
- tonyedgecombe 10y ago
  I don't see British trade expanding post brexit, we will almost certainly loose a substantial portion of our financial services and over time car manufacturing, the only trade likely to increase is tourism.
ting_bu_dung 10y ago
Actually, because of brexit, Europe will get rid of pro-China England, and will be able to impose alot of anti-dumping restrictions to China.
mark_l_watson 10y ago
Another possible source of speculative chaos might be any fallout if Deutsche Bank collapses. I have seen some really negative news articles about DB lately.

by Aldo_MX 10y ago

Kenji 10y ago

Both the Brexit effect and the speculative chaos you propose are very short term. The fluctuations do not correspond in any way to the performance of the state and economy backing these currencies. Therefore, I think that if it benefits CNY, then only for a short timespan. However, if the US really tightens the screws on international trade, it will suffer longterm and so will its currency. (And yes, I find the prospect of closed markets, increased tariffs and the like dreadful. There is no reason for the US to do that. This is different from Brexit though, since the EU conditions free movement of people and huge bodies of law on the trade agreements. A post-Brexit Britain may have more free trade than ever before since it can do its own agreements with any country - like any sovereign nation should.)

tonyedgecombe 10y ago
I don't see British trade expanding post brexit, we will almost certainly loose a substantial portion of our financial services and over time car manufacturing, the only trade likely to increase is tourism.

ting_bu_dung 10y ago

Actually, because of brexit, Europe will get rid of pro-China England, and will be able to impose alot of anti-dumping restrictions to China.

mark_l_watson 10y ago

Another possible source of speculative chaos might be any fallout if Deutsche Bank collapses. I have seen some really negative news articles about DB lately.