Un-Pegging China's money,the renminbi.

Also known as the Chinese yuan,In 2005, it was officially unpegged and as of April 2009, had an exchange rate of 6.8 RMB to $1 U.S. dollar.

With the dollar depreciating,Beijing may have to shift its exchange rate tactics once again.
Even while calling for a global substitute for the dollar's reserve currency role, Beijing has essentially returned the yuan to a dollar peg, a policy it formally abandoned back in 2005 in favor of multiple foreign currency reference points. So, while Washington frets over the apparent halt in the yuan's progressive appreciation, economists say that China has actually taken measures to keep the yuan from falling against the dollar, by shifting its exchange rate regime back to tracking the dollar since the global financial meltdown began.
China sets the yuan's value based on a narrow range of fluctuation against a basket of currencies, including the dollar, euro, yen and won, and does not disclose the different weights assigned to each currency. But through some sophisticated statistical methods, the change in the weighting of each foreign currency over time can be inferred.

But, as the global financial crisis unfolded and the dollar began to rebound against the euro, Beijing started in May 2008 to move the yuan back toward giving primary weighting to the dollar, a move that prevented it from backsliding relative to the greenback. In fact, in the period from September 2008 to February 2009, Beijing's currency regime "has come full circle, virtually back to what it was in late 2005," said Frankel, who is the director of the Program in International Finance and Macroeconomics at the National Bureau of Economic Research.

Since China weathered a whopping 25.7% drop in its exports and faces the headache of 23 million unemployed migrant workers on its hands, it would have made more economic sense for Beijing to let the yuan depreciate to make its exports cheaper abroad.

But Beijing has not shied away from ruffling U.S. feathers with recent talk of replacing the dollar as the global reserve currency, forcing President Barack Obama and Treasury Secretary Timothy Geithner to defend the dollar. So why is it reluctant to worsen the U.S. trade imbalance by letting the yuan fall? Given that the United States is China's second-largest market, Beijing also "doesn't want the U.S. to be weaker than necessary," Fishwick noted.
There are other possibilities: Beijing wanted the "security blanket" of dollar pegging during last year's financial crisis, or its officials had actually expected the dollar to fall since the crisis started in the United States, Frankel noted.
For now, with dollar depreciation on the horizon as a consequence of Washington's profligate spending, Beijing again faces two currency options. It could let the yuan continue to shadow the dollar and thus depreciate against the rest of the world, "easing domestic monetary conditions," according to Morgan Stanley. Or it could shift the yuan away from the dollar, avoiding a further U.S. outcry. China currency watchers are keeping an eye out.

The Dow,tuesday 5/01/10 is 8 market days to expiry.(prior 7th day..lookout)

Nikkei Futures expiry:8.01.10.
9:30am:--A mild bearish open followed by immediate slide.

10:30am:--Retracement to high engulfing the opening slide.A double top having hangman and shooting star.

11:30am:--Factory orders for November were up while Pending home sales for November decreased.Hammered on news release.

12:00noon:--Usual consolidation time at session bear pivot which failed to reach the MAV resistance.

1:30pm:--Breakout to another low.Attempt to reach session MAV failed again.

2:30pm:--A new low of the day finally.Bullish harami.

3:30pm:--Breakout of the MAV resistance.

4:00om:--Bullish close despite a mild index nett loss.

Technically,Tuesday's hangman is a warning of pullback.To date candlestick is still very bullish.

Any 2nd pullback will be Tuesday's lower shadow before the Dow stage another rebound.

Leadership from financials helped pull stocks up from negative territory a few times this session.

Investors turned cautious on the second trading day of the year as a pair of economic reports gave mixed signals about how the recovery was going.

Traders will also be watching the 2 p.m. release of minutes from the Fed's last meeting.