Six months after China became the 3rd biggest economy in the world (and now the most important country in the world right now IMO), trading in Yuan continues to grow and it has major implications for the US$ looking out long term but the process will be slow and steady rather than anything abrupt. Today Hong Kong and China announced an agreement to settle trade between the two in Yuan in transactions beginning in July. A PBOC Governor said China’s FX reserve policy is “always quite stable,” implying that the US$ will still remain the reserve currency for a while but the Yuan will grow in stature. Chinese stocks rose to a one year high for a 4th day ahead of two key manufacturing PMI #’s tomorrow. Copper is at a two week high. Euro region economic confidence rose to the highest since Nov coming in two points more than expected. Weak economic data weighed on Japan. US Payrolls on Thursday cap a busy week for economic data beginning tomorrow.
Miller Tabak + Co.