Dow Jones Industrial Average will avoid the collapse due to the revaluation of the yuan

Dow Jones Industrial Average is prepared to reflect the attack bears

In brief: The weak Chinese currency could become key to the stability of the U.S. stock market. The level of support for the Dow Jones Industrial remains low.

Dow Jones Industrial is approaching a dangerous risk. Dow Jones Industrial Average is coming out with 10,442.41 points. The only decent support for the Dow index, analysts said the revaluation of the yuan. The most discussed topic in the markets – the revaluation of the yuan (the Bank of China on Saturday said it will continue the reform of exchange rate policy and increase the flexibility of RMB exchange rate). Although Chinese authorities have not made statements on how the revaluation will be implemented.

Nevertheless, stock markets rose noticeably on this news in the previous trading session. Today is rethinking – no specifics on the revaluation is not (yuan generally remained stable) and market adjusted downward. As a result of the trading session S & P -0,4%, Asian indices in the red by more than 1%. We are waiting for more specific statements regarding the revaluation of the yuan from the Chinese authorities before the G20 summit in Canada, June 26-27. Rolled down as quotations EUR / USD (up to 1.23) and oil (up to $ 78). In the near future we expect further increases in oil prices – commodity companies can benefit most from potential revaluation of the yuan. Of the major events coming days to select the Fed decision on rates on Wednesday, attention will be focused on the statements of officials on the period over which plans to change the bet. Today will be released statistics on sales in the secondary housing market, the report will address U.S. Treasury Secretary Timothy Geithner.

Anrey Torbinski
2010-06-22 13:30, Economics.

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