Thursday, 24 April 2008

Asian currencies turn up 2005: Phils/HK$/Yuan. 2008-02-24

Short update on Asian currencies 2008-02-24:

The Philippines Peso has been climbing against the US Dollar and the British pound. From a low of about 56 to the $ and 107 to the GBP, the Phils Peso is now 40.575 to the US$ and 79.7 to the pound sterling. (These figures updated 2008-02-24 at 6.31 p.m.)

Look at those 5 year charts on those pages! This in my view is the start of the long march up in Asian currencies.

Taking a look at the Chinese Yuan (Renminbi), this currency started its march up against the US Dollar in about June 2005, shortly after the dollar peg was loosened to allow some wiggle room. Of course, the 'wiggle' has been all up for the Yuan and down for the dollar. This coincides exactly with the peak in the US$ against the Philippines Peso. Fascinatingly, the Phils Peso is rising vs the Chinese Yuan since Autumn 2005, maybe because the Chinese are still following a mercantilist policy of keeping their currency relatively weak to world currencies to bolster export earnings. China is still letting it fall vs the stronger world currencies but not quite as fast as the US dollar is falling!

Similarly, Sterling peaked vs the Yuan in at the turn of 2004/2005, just when it peaked agaist the Phils Peso. Coincidence? Hmmmmm. Could be a TREND!

Looking at other Asian currencies, the US$ has been in a downtrend against the Korean Won and the Thai Baht for at least 5 years, before the unpegging of the Chinese Yuan. ANother fascinating chart is the Chinese Yuan vs Hong Kong $ which shows that the Yuan rose above 1:1 parity at the turn of 2006/2007 and is now HK$1.09.

No comments: