China has set Yuan reference rate at 6.3408 against the USD – this is the biggest fixing since August 2015.
Chart courtesy of Bloomberg.
Any strength in the USD demands China take this action.
Then we have China dictating to the Federal Reserve not to increase interest rates – the reason is obvious – more devaluation of the Yuan – transfer of the devaluation through to commodity based economies and SE Asia.
Seems the Federal Reserve is dictated to by China – the problem is that interest rates have risen – market forces – through inept central bankers, wars and corruption – has forced countries to borrow at higher interest rates to cover their current account shortfalls.
This includes OPEC and Denmark – even to the point that Sovereign Wealth Funds are disposing of assets to balance these deficits.
Plus – yes that one outlier- we have Credit Rating Agencies – stalking in the background waiting for the opportunity to re-rate all countries.
My question is when will European countries credit rating reviews be released – in light of the depressed manufacturing data and deflation throughout the Eurozone countries?