An attractive yuan.

The Chinese Yuan is attractive for a number of reasons. First, investors and Central Banks want exposure to China’s economy; its average annual growth rate of 10% over the last 30 years is far-and-away the highest in the world. “China’s economic output will be more than $5 trillion, or around 9% of the world’s economy, according to the International Monetary Fund.” Second, the fact that the RMB is fixed is in some ways a perk: the wild fluctuations that most currencies witnessed as a result of the credit crisis has made some wonder if market-determined exchange rates aren’t overrated. Finally, the widespread consensus is that the RMB will appreciate anyway, so holding it seems like a safe bet.
The bet is that holding yuan-denominated assets is an important feature of a diversified national reserve.” In addition, China has signed Yuan-denominated swap agreements with a handful of its most important trade partners, totaling $100 Billion over the last year
On June 19, the People’s Bank of China loosen the yuan peg a day just after their week long Dragon Boat Festival.
The yuan's action seen in the first couple of days of trading. On Day One, the Yuan rose to almost the very limit of the 0.5% band allowed by the People’s Bank of China. On Day Two, however, the Yuan slipped almost .4% as Chinese State-owned banks bought up US dollars. While there is definitely room for China’s central bank to deny direct intervention, it seems quite apparent that the dollar-buying activity was simply the state-owned banks acting as proxies for the central bank. Perhaps Tuesday’s activity was simply a test to determine to what degree the currency could be influenced (note the lack of the term manipulated) in a given scenario.
Tracking the Dow.23/06/10
Asian index/options futures expires 30/06/10.Rollover contracts about to start.
9:30am:-- A shooting star opener.
10:30am:--Bearish spike down due to sharp drop in new home sales for May.
11:30am:--Technical rebound but still holding in the bearish zone.
12:30noon:--Bullish inverted hammer noted.Awaiting the latest policy statement from the Federal Open Market Committee.
1:30pm:--Holding at the MAV resistance line,bulls at work.
2:30pm:--The FOMC's statement indicated that economic recovery is proceeding and that the labor market is improving gradually.Bullish spike up to day's high.
3:30pm:--A pullback to the MAV support,but bullish inverted hammer is holding it stongly.
4:00pm:--A four-legged breakaway doji,indecision.
Wednesday's spinning doji formation has completed a morning star candlestick pair.It closes inside the previous day's bottom.
The four-legged doji closing at 4:00pm is a sign that a tremendous upward thrust of short-covering is bound to happen.
The Federal Open Market Committee (FOMC). opted to maintain the target range for the federal funds rate at 0.00% to 0.25%, as expected, and it continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels of the federal funds rate for an extended period.