Bond Outlook [by bridport & cie, July 27th 2005]
Well it has finally happened! The Chinese have revalued the CNY by 2.1% against the USD and have moved into a managed floating regime with reference to a basket of currencies. Back in May the market viewed a revaluation as a certainty, put simply, the fundamentals had been demanding it for too long. However, China’s ability to surprise the market and plain ignore the fundamentals had led some (ourselves included) to start wondering not how much they would revalue, but if they would revalue at all. |
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