2010-04-14

Yuan revaluation will be costly for U.S.

Picking up on my idea that yuan revaluation will expose monetary inflation, Bloomberg has an article detailing how other Asian currencies will rise even more.
Rupiah Gains 5 Times More Than Yuan on Revaluation
“A Chinese appreciation will kick off tightening in the whole Asian complex of currencies,” said Richard Benson, who oversees $14 billion of currency funds as an executive director at Millennium Asset Management in London and is backing the won and the ringgit to lead the gains. “These currencies are fundamentally cheap.”
If China imports more resources and those resources come from Indonesia (rupiah), then maybe Market Vectors Indonesia (IDX) will continue to be a winner.

On the flip side, everything imported from Asia will rise in cost for the U.S.

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