China wants to make the currency more flexible Rinminbi, but do not add value. Nevertheless, the markets will react positively. The currency dispute is not so far from settled.
Confusion around the renminbi: China has announced after the weekend, more flexible for the national currency have gradually responded positively, especially the European markets. Especially export-heavy figures of the industry, including the automotive industry took off, with gains in the trading week. The euro climbed to a four-times-week high of $ 1.2467. But the fact is that the Chinese currency was revalued yet until now.
While many experts have seen the announcement over the weekend as a sign of appreciation against the dollar, Commerzbank is skeptical. It fit into the picture, that "the Chinese central bank announced further reforms to avoid a possible trade war with the United States."
On closer inspection, proving to be the opinion of the Chinese monetary authorities but did not notice an appreciation against the dollar. Other concrete steps were not announced, a limited foreign exchange expert Lutz Karpowitz of Commerzbank.
The Fed has even found that there was now due to the lower surplus in China's current account is no scope for a greater appreciation.
No relaxation in the monetary dispute
In order to justify the actions of the Chinese, the Commerzbank consider two interpretations plausible. "Either it is simply a ploy or Chinese, Beijing has decided to tie the yuan to a basket of currencies in the future," wrote Karpowitz.
Renminbi is the official name of the country's currency yuan is only the currency unit, that the real money. Often, the yuan is also incorrectly referred to as the Chinese currency.
On the Japanese stock market, the players were glad, however, that the renminbi has not yet been upgraded. Many investors are concerned that an appreciation of Chinese currency is more expensive, the Japanese yen.
As the yen did not rise, investors bought the lot and widely dispersed, which boosted the markets. Earlier, investors had assumed that the People's Republic of changes in the exchange rate against the dollar is only slowly and in the smallest possible steps.
Burden on the G-20 Summit
The notice and the return of the Chinese rowing over the weekend has potential implications for the G-20 summit in Toronto, which is imminent. The appreciation would have been put into the dispute over the trade imbalance. Now it looks as if it would give in the People's Republic is not as strong as anticipated earlier.
For almost two years, the yuan pegged to the dollar. It has entered China, especially in the United States accused of keeping its currency in the interest of exports at artificially low.
Japan has broken out of patience: the country wanted to watch the appreciation of the yen are no longer stand - and intervened for the first time in six years in favor of the dollar.
At a rate of 83 yen per dollar, it was the Bank of Japan seems too much: As the yen fell short in his soaring against the dollar this brand, decided to Japan for the first time in six years to intervene in the foreign exchange market.
The national flags of Japan and the United States in front of a chart that shows the price development of the yen against the dollar. Most recently, Japan, the appreciation of its currency too strong. The "Bank of Japan," intervened in the foreign exchange markets and bought dollars.
For the first time since March 2004 bought the land of dollars to stop the yen's appreciation. It was a solo Japan, Finance Minister Yoshihiko Noda confirmed on an ad-hoc press conference in Tokyo. The international partners were informed, however.
For details, he said nothing. He reiterated, however, that the government was committed to all necessary measures against too high yen exchange rate, also belonging to intervene in the foreign exchange market.
Yen at the highest level in 15 years
A government spokesman said Japan was trying to convince the U.S. and the Europeans of the need for intervention. According to traders, the Japanese central bank bought U.S. dollars at an exchange rate of around 83 yen. The yen had previously attained in Tokyo against the dollar to 82.87 yen, its highest level in 15 years.
The strong yen, especially strains the Japanese export industry and heavy burden on economic recovery difficult to Nippon. Because Japan's economy is heavily dependent on exports.
The U.S. House of Representatives decided just to introduce a tax on goods when they are due to the devaluation of another country particularly cheap. It is an affront to China that its currency against the dollar has especially favorable. The European Union - China's largest export market - increased pressure on the People's Republic. And IMF Managing Director Dominique Strauss-Kahn warned: "Obviously, the idea spreads, currency as a political weapon."
China is the world in the pillory: The country of manipulating the yuan exchange rate in order to fuel their own exports, the reproach of America. The accusation is not without a certain irony. For if an economic power in the foreign exchange market, "war", then leads the United States. Increasingly desperate attempts by the government of President Barack Obama to boost the economy.
Fed Chairman Ben Bernanke helps: The U.S. central bank plans to further liberalize its highly expansionary monetary policy. So the Fed wants to stabilize the shaky U.S. economy. A weak currency and low interest rates should help exporters and ease the burden of public debt. Thereby aggravating the tense situation in America in the foreign exchange market. Investors wonder what the point of this policy, which was right in the crisis. But now it hurts the dollar.
Cheap red herring
And what does America? It does not return his own business, it railed against China. Not a day goes by that does not shoot an influential economist poison arrows towards Beijing, a lobbyist for U.S. companies complaining about unfair competition or a government representative of the Chinese Premier Wen Jiabao calls to revalue the yuan strong. Specifically, the fear is fueled from a grueling race to devalue.
The headlines remind us of the hot spring, when the euro had fallen into the fire of criticism and threatened to break apart. At that time agreed to speculators in London and New York: Now we get ready Europe. The attack is unsuccessful, because the EU and IMF tied a last minute rescue package. The signal was clear: we will not let the Euro-zone fail, because there are no winners.
The € opponents have understood the common currency gains in value since then. In Greece, Ireland and Spain, governments have struggled through in spite of public opposition to austerity budgets and reforms. The EU finance ministers agreed to even out that Brussels monitored in future national budgets to prevent a Greek-style routine.
Because the euro area economy returns to strength, is already thinking about the withdrawal from multi-billion dollar economic stimulus programs. And ECB chief Jean-Claude Trichet would reduce only too happy to cash flow, has been fighting with the central bank's financial crisis. That would certainly make the euro against the dollar even more.
China should remain stubbornly
Oddly enough, Europe can not appreciate this hard-won successes. Instead, they drilled into his own wounds, can be intimidated by the evil word currency war and still does in the chorus of those calling for a higher yuan exchange rate. This Europe has no need for that. Especially for the German economy, the rising euro exchange rate is still far from being a threat
Who buys German goods abroad, has determined for reasons other than affordability. And for the upturn, the growth of the global economy weighs heavy. Especially in times of crisis, China has done much to revive the global economy. Wen Jiabao is doing so well to raising the price of the yuan in small steps. A radical improvement would be not only for China but also for the rest of the world is a disaster.
America must stop looking to blame for its own economic misery for others, whether in Europe or China. The problems of the U.S. economy are not in the exchange rate of dollar, euro and yuan, but in a misguided monetary and fiscal policy and a serious lack of investment in the home.
The Fed, which has done many things right in the crisis undermines now fearful of its monetary policy with confidence into the country. The government has made in the just completed fiscal year $ 1.65 trillion national debt. The national debt is just over 94 percent of economic output, but there is no mention of saving.
Worse still: From 2006 to 2009, the investments in the U.S. have dropped by one third in the euro zone, however they put to around eight percent. The result: the capital stock of the United States crumbles. The economy has spent only ten percent of their capital in production in Germany is 20 percent. There, German companies presented her capital goods that are in demand all over the world, exchange rate or not. America should take this as an example, instead of lashing out against German export success and China's exchange rates.
How do we get our money? This question Europe's banks increasingly unsettled recently. Now the major central banks intervene: Until the coming year, they provide the banks with large U.S. currency. The stock is pleased that, especially bank stocks make significant gains.
The largest central banks in the world make common cause and provide the banks beyond the end of time in dollars. The Council of the European Central Bank (ECB) decided in consultation with the U.S. Federal Reserve, the Bank of England, the Bank of Japan and the Swiss National Bank, across three businesses in U.S. dollars with a maturity of around three months of the year The stock climbed to carry out the announcement to the top. The euro rate jumped up and climbed to $ 1.3936.
Click to enlarge
The Dax responded positively to the announcement by the central banks, in large-scale dollar on the market. At the close of trading, he was with gur three percent increase. (© DAPD)
In October, November and December, the banks are able to supply at a fixed interest rate of the ECB with dollars. Thus the monetary authorities want to ensure the liquidity of the banks. European banks had fallen, it increasingly difficult to borrow money in the United States. Your local business partner, especially in U.S. funds, were hesitant lent money to Europe. Reason for the reluctance was the worry that European banks could be due to the euro debt crisis in trouble.
In recent weeks, the ECB had already provided twice banks with dollars. On Wednesday it approved a payment of 575 million dollars in two banks of the euro zone. Previously on 17 August $ 500 million went to an institution. He was the first time since February that the central bank had to apply this policy instrument.
Following the announcement by the monetary authorities rose sharply at the stock market. The German benchmark DAX put in the afternoon on the Frankfurt Stock Exchange by about three percent to just under 5500 points. The bank's shares experienced a renaissance. The price of Deutsche Bank rose by twelve percent in the meantime, even more than twelve percent were there at the BNP Paribas, nine percent at Commerzbank. The French banks Credit Agricole and Societe Generale gained more than six percent.
In contrast, the dispute went to the ECB's head to the purchase of government bonds continued merrily on Thursday. Board member Lorenzo Bini Smaghi defended the purchases, saying critics from their expertise. ECB chief economist Juergen Stark, who is said to have voted against these purchases went in the evening in a speech in Vienna is not explicitly on the purchases, but said only: ". The pooling of national debt is the completely wrong way"
The ECB began the government bond purchases in May 2010 during the Greek crisis, made a break and then took it up again this summer. She has since taken over government bonds worth 143 billion euros, mainly from Italy and finally Spain. They financed the purchases indirectly heavily indebted countries, and takes risks in its own balance sheet.
Highly susceptible to volatile bond markets
Bini Smaghi said the market for government bonds take a key role in the functioning of financial markets as a whole. The criticism of the purchases was the result of "lack of economic analysis and insufficient knowledge of the crisis in which we find ourselves." It applies to prevent a liquidity problem arises from a far-reaching solvency problem.
According to the ECB's Monthly Report was threatened in early August, a similar situation as after the bankruptcy of Lehman and why are the bond purchases were resumed. The volatility in the bond markets have even reached the level of May 2010 and exceeded the state after the collapse of Lehman.
In addition to the purchases of government bonds to justify the ECB are other risks that they took during the crisis. This includes above all the collateral that banks submit to the ECB in order to refinance. "An increase in the risk of a central bank is justified in times of financial stress, when the central bank would result from inaction potentially higher risk," say the ECB's economists.
The risks should be compared to the benefits that will accrue to society. The risks would be monitored and assessed on the financial buffer of the euro system. The collateral would be submitted by the banks based on market prices every day. Moreover, the ECB would make price reductions on the collateral.
The euro is under pressure: When he was a good start into the new year, it now falls to a 16-month low. This is due to the downgrading of the creditworthiness of Hungarian and reports of new problems in the debt-ridden Greece.
The euro has fallen in the night to Monday because of concerns over the escalation of the European debt crisis in comparison to the dollar to its lowest level since September 2010. At times, the European single currency had fallen to $ 1.2666. Finally, the euro could, however, recovered slightly and hovered around the mark of 1.27 dollars.
The European currency has for days because of a further escalation of the situation in the highly indebted southern European countries under pressure after it was launched with prices over $ 1.30 in the current year.
Experts made the continuing bad news on the European debt crisis responsibility. Without a better outlook for the euro-zone there would be no real recovery for the euro, Rob Ryan said of the bank BNP Paribas. The Asian stock markets traded mostly weaker. In Japan, the markets remained closed for a holiday.
The concerns about the development of the European economy with the downgrading of the creditworthiness of Hungary again became larger. The country has now received from all three rating agencies to junk status. Also, a mirror-report that the International Monetary Fund (IMF) no longer believes that Greece can carry its debt based on the current redevelopment plans permanently cared for unrest.
Weaker in Australia, South Korea and Hong Kong-listed the major stock markets. Bucking the trend put the shares in Shanghai. The index traded just over two percent higher.
On this Monday advising Chancellor Angela Merkel (CDU) and French President Nicolas Sarkozy on the next steps in the debt crisis. This is not just about the implementation of the Fiscal Pact, which seeks to ensure that euro-zone countries and EU countries to rein in budget deficits. Berlin and Paris are working out ways for even more growth and employment.
Topic in the Chancellor's Office should also be the faltering billion-aid to Greece and the financing of the bailout ESM, which should already start in mid 2012. It is also possible that coordinate with Merkel and Sarkozy over the planned introduction of a financial transaction tax. Paris is considering going it alone if necessary. Discussions will likely also the threat of downgrading the creditworthiness of France and other euro countries.