U
Unregistered
Guest
There has been alot of speculation over the last couple of years over the prospects of the chinese revaluing their currency against the dollar. I read an article in last weeks Sunday Business Post which predicts that this could happen before the end of the year. The Fed in America has been urging China to do just that, the thinking is that it would relieve the american current account deficits. However I think that if the chinese do this it could spark a serious fall in the dollar simply because american assets which are held by the asians will be dumped. It could also cause oil prices to rise further since oil would then cost less in the chinese currency increasing their demand for it. Also goods which are made in china would rise in price in the US resulting in more inflationary pressures in the US and globally.