If the Chinese keep up their peg, holding RMB is equivalent to holding dollars.
If they fail to maintain the peg, the RMB will most likely rise. Most US consumers are already exposed to the downside of this risk - they have expenses which will rise if the RMB goes up (e.g., all the goods they purchase which are made in China).
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If the Chinese keep up their peg, holding RMB is equivalent to holding dollars.
If they fail to maintain the peg, the RMB will most likely rise. Most US consumers are already exposed to the downside of this risk - they have expenses which will rise if the RMB goes up (e.g., all the goods they purchase which are made in China).
Holding RMB is a hedge against this.
Tell me more about it :)
I myself have a Long Straddle on CYB since some time last year, betting that it moves in either direction.
Let's just say hoping to make guaranteed profit cause chinese promised it isn't such a great strategy :)
They have 1 week more to move though, just in time for Paramount Leader's visit to D.C.