Recent gold buying is a very good indicator that the market is hedging risk aversion at the same time with risk 'on'
Despite Japan's YEN intervention, which should have a larger reverberation that should be felt around about now (chaos theory: y'know butterfly effect, cause and effect, fuck with something[that shouldn't be fucked) and it ends up fucking worst...you get the drift), the global trade war should be ready to start, which Asia baiting and US shooting. A protectionist/trade war may end up moving into geopolitical tensions at some-point. Regardless the consequences for a trade war with Asia will decimate valuations and insurance spreads should widen (CDS's).
It's all a joke refer:
DOW JONES NEWSWIRES SHANGHAI (Dow Jones)--The yuan ended its six-day rally against the U.S. dollar on Friday, following a less aggressive effort by China's central bank to guide its currency higher after the completion of the closely watched U.S. Congressional hearings on Beijing's exchange-rate policy. Traders and analysts said Beijing may have little desire to tolerate much more yuan appreciation in the near term given the currency's 1.0% gain against the dollar in the previous six trading sessions, even though international pressure for a higher yuan will likely stay strong. U.S. Treasury Secretary Timothy Geithner's apparent effort to stake out a middle ground during his testimony at the Congressional hearing overnight also took some pressure off the yuan, traders said. At 0515 GMT, the dollar was at CNY6.7265 on the over-the-counter market, up from CNY6.7248 at Thursday's close. In the offshore market, one-year dollar-yuan nondeliverable forwards slipped slightly to 6.6340/6.6380 from 6.6390/6.6430 late Thursday. The yuan's decline came after the People's Bank of China set the dollar/yuan central parity at 6.7172, a fresh record low for the daily reference rate but down only a touch from 6.7181 Thursday. "The central parity was certainly higher than expected and so demand for the dollar rose this morning," said a Shanghai-based trader at an Asian bank. "Our take is that the dollar-yuan may be nearing a significant rebound," he added. "The U.S. Congressional hearing is over. And we don't think the yuan will continue to appreciate sharply in the near term." Facing hostile Congressional questioning, Geithner pressed China to significantly boost the value of its currency but also tried to fend off lawmakers who want the U.S. to take harsher action against Beijing's policies, indicating the Obama administration remains reluctant to formally label China a currency manipulator under U.S. law. While the U.S. feels the yuan is "significantly undervalued," a formal designation would "not be a particularly effective tool" for achieving U.S. goals, he said. "The comment yesterday was actually quite balanced," said a foreign-exchange strategist at a U.S. bank in Singapore. "I think it's the right way to engage China, because the Obama administration is quite aware that if you put too much pressure on them it will only become counter-productive." But he said China is unlikely to maintain the recent pace of yuan appreciation, adding his bank has left its prediction that the dollar could fall to CNY6.60 by year-end unchanged. Donald Straszheim, head of China research at Los Angeles-based ISI Group, said China doesn't believe its economic situation warrants much yuan appreciation. "Beijing officialdom is reasonably comfortable with the growth and inflation outlook domestically now," Straszheim said. "So moving the currency for its short-term effect on economic activity within China is not the immediate motivation." Analysts said the possibility remains for the U.S. Congress to take punitive action against China on its currency policy in coming weeks. A series of high-level international meetings later this year could still put the spotlight on the yuan valuation issue, among them the UN General Assembly in New York next week--when China Premier Wen Jiabao plans to meet U.S. President Barack Obama, and the Group of 20 leading world economies summit meeting in November.
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