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  1. #1
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    Default China decides to unpeg currency against the dollar

    China has announced it is to ditch pegging its currency against the dollar in a move which should see the economy in China slow. China has now decided to opt for a basket of currencies to manage the Yuan

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    what does that mean:?: more detail please.
    rollout the barrel

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    Well China has been booming and buying up resources from other countries, America has been complaining that the Yaun was undervalued and was having an unfair effect on the market. In effect it will be more expensive for China to export so will slow down their economy.
    I was also curious as to whether it may have an effect on the programs which Pips run.

    Below is a statement from the Chinese central bank...

    SHANGHAI, July 21 (Reuters) - The People's Bank of China issued the following statement on changes to the yuan (RMB) exchange rate regime.

    With a view to establish and improve the socialist market economic system in China, enable the market to fully play its role in resource allocation as well as to put in place and further strengthen the managed floating exchange rate regime based on market supply and demand, the People's Bank of China, with authorization of the State Council, is hereby making the following announcements regarding reforming the RMB exchange rate regime:
    1. Starting from July 21, 2005, China will reform the exchange rate regime by moving into a managed floating exchange rate regime based on market supply and demand with reference to a basket of currencies. RMB will no longer be pegged to the US dollar and the RMB exchange rate regime will be improved with greater flexibility.
    2. The People's Bank of China will announce the closing price of a foreign currency such as the US dollar traded against the RMB in the inter-bank foreign exchange market after the closing of the market on each working day, and will make it the central parity for the trading against the RMB on the following working day.
    3. The exchange rate of the US dollar against the RMB will be adjusted to 8.11 yuan per US dollar at the time of 19:00 hours of July 21, 2005. The foreign exchange designated banks may since adjust quotations of foreign currencies to their customers.
    4. The daily trading price of the US dollar against the RMB in the inter-bank foreign exchange market will continue to be allowed to float within a band of +/-0.3 percent around the central parity published by the People's Bank of China, while the trading prices of the non-US dollar currencies against the RMB will be allowed to move within a certain band announced by the People's Bank of China.

    The People's Bank of China will make adjustment of the RMB exchange rate band when necessary according to market development as well as the economic and financial situation. The RMB exchange rate will be more flexible based on market condition with reference to a basket of currencies. The People's Bank of China is responsible for maintaining the RMB exchange rate basically stable at an adaptive and equilibrium level, so as to promote the basic equilibrium of the balance of payments and safeguard macroeconomic and financial stability.

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    And now Malaysia too....


    KUALA LUMPUR, July 21 (Reuters) - Malaysia has decided to drop its policy of fixing its currency to the U.S. dollar and will move instead to a managed float of the ringgit, the country's central bank governor said on Thursday.
    Zeti Akhtar Aziz, speaking to reporters moments after China announced it was allowing its yuan to appreciate and tying it to a basket of currencies, said she did not foresee the ringgit exchange rate deviating significantly from the current level.
    The ringgit has been pegged at 3.8 to the dollar since September 1998 when it was imposed to help Malaysia cope with the Asian financial crisis.

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    Can't say I didn't see this coming,it was just a matter of time.Thanks for the official news,gadget .

    What could be next:the Euro?

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    This further hurts the USD. You know, the same currency PlPS is using. This further hurts the investment.

    KE

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    I think its time to do the currency-switcheroo.My humble opinion.

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    Default Currency

    I think we (Americans) would be smart to open foreign bank accounts and move away from the Am Dollar! I want to do this but I am not exactly sure how!!

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    thanksalot,

    All you'd need to do is open an account with a foreign or American bank in either Euros,Cable or Swissies(for example)and convert your Greenbacks to the alternate currency as you receive them.
    Sure,it'll cost a bit to convert,but in the long run,you'll be taking advantage of fluctuations in the currency ratios.If it's obvious enough to you that this devaluation isn't just a short-term glitch,then you'd figure that you'd be getting ahead(or at least,not losing as much buying power),at least in the short-term(I think).
    As for structure,well,that depends on your needs.

    Hope this helps.

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    Default Currency

    Thanks Rahly for the info. I am an old guy and hate to see the decline of the dollar as I think will occur over the next year. Maybe I should buy gold!!!

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