The RMB has finally rose to its highest percentage gain since october 2008. A 21 month high. The Chinese government finally decided to unpegged its yuan to the dollar after much pressure from major world leaders. What could this mean to most people?
Commodities to rise. As it is now, China is the world no.1 producer and consumer of commodities, the rise in the yuan signals a rise in commodities as there were pre contracts made to deliver them at the stagnant price before yesterday change to the RMB. As a result, many companies holding a passive income from china at a fix price sees the gain in currency as a gain in their cash flow. At the same time, the same amount of RMB will be used to purchase the commodities which makes the commodities rises at the same time in congruence to the RMB
Shipping Stocks. Time charter is the word. Any ship owners with business in China chartering out their fleets at RMB at a given time will see their stocks soaring. Companies such as Cosco and NOL and major shipping suppliers must be kept on the look out. It is the best time now for them to be purchased.
US stocks. The Major indices in USA will soar today at least to a 2% high, with the Americans finally getting their way. I don't see a reason for them to stop climbing, i predict dow jones should hit 12k anytime before this year.
China stocks. A rise in the currency signals a flexible stance that the government has adopt. One way is to curb inflation and another way is to untighten its money and prevent a bubble. Most china stocks will rise because they are the world biggest holder of RMB. So UETFSSE 50 anyone?
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