Two Ways to Play: Stronger Hints That China Will End Dollar Peg
Strengthen your portfolio in good times and bad.
Topping headlines this morning, People's Bank of China Governor Zhou Xiochuan gave the strongest hint yet from a senior government official that China would abandon the dollar peg. According to the Financial Times, Zhou still gave no hint as to the timing of the currency shift but described the dollar peg as temporary and said it was put in place in mid-2008 to weather the global financial crisis. The comments contrast recent statements by Premier Wen Jiaboa, who said the Chinese won't yield to any outside pressure in letting the yuan appreciate. But Zhou said over the weekend, "Sooner or later, we will exit the policies."
From the Bull Pen: Investors want to keep focusing on stocks doing more business in China. Consider Deere (DE), which is attempting to make a new 52-week high. A short-term sell stop can be set near $58 support on the hourly chart.
From the Bear Cave: The end of the dollar peg will put more downward pressure on the US dollar making dollar-denominated assets less favorable. Consider the Ultrashort 20+ Treasury ETF (TBT) with a possible bullish double-bottom formation at $46.50. A sell stop can be set below that level.
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A Quick Check Around the World
Asian trading closed with the Nikkei 2.09%, India 0.64%, Hang Seng 1.97%, Shanghai 0.73%, and Taiwan 1.25%.
Across the pond, we see the FTSE -0.20%, DAX -0.09%
As of 8:15 AM EST, S&P Futures are trading +01.75 to 1138.25. Nasdaq futures are +2.500 to 1888.00.
A Look at Commodities
Over in commodities, crude oil is +0.34 to 81.82 while gold is +0.500 to 1135.70 this morning. Silver is +0.058 to 17.440 and copper +0.0200 to 3.4375.
The dollar Index is -0.1950 to 80.2650.
No economic events scheduled for today but click here for the full trading radar.
Happy Monday! Good luck and hope you all have a great week!
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