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SO WHAT ELSE BOTHERS US? … THE RECENT DEBASING OF THE CURRENCY AND THE CHINESE YUAN BANDS. THE RECENT PRESS ON CHINA HAS FOCUSED ON DEFAULTS IN CHINESE YUAN DENOMINATED MARKETS, WE THINK THE REAL ISSUE IS THAT THE CHINESE ARE MAKING MOVES WITH THEIR CURRENCY TO MAKE THE YUAN A COMPETITOR TO THE DOLLAR AS A RESERVE CURRENCY…INTERESTING THAT IN THE LAST FEW WEEKS WITH THE SITUATION IN THE UKRAINE, THAT THE DOLLAR HAS NOT MADE UPSIDE MOVES VERSUS THE EURO…WE THINK THERE HAS BEEN A CONCERTED EFFORT TO SELL DOLLARS BY BOTH THE CHINESE AND POSSIBLY THE RUSSIANS… THE DROP OF 100+ BILLION IN FED HOLDINGS FITS INTO THIS RATIONALE. WE THINK THIS IS THE BEGINNING OF A CONCERTED EFFORT. Attribution: Andy Brenner – RBC. |
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