Commodity Trade Mantra

Posts Tagged ‘Plunge Protection Team’

Will Fed Kill The Dollar To Save Markets - Or Sacrifice Markets To Save Dollar?

A strong dollar makes exported US military hardware too expensive for foreign purchases & a weak dollar can cause a lack of confidence in the dollar & can cause inflation because the US relies heavily on imports. If an interest rate hike causes the equity markets to crash, demand for US Treasuries will spike, thus furthering the Fed’s objectives of keeping demand high for US Treasury bonds.

China Injects Hundreds Of Billions In Liquidity To Offset Yuan Intervention

The PBoC injected CNY120 billion via 7-day reverse repos on Tuesday – that was triple the CNY40 billion injected late last week & CNY110 billion yuan in 14 banks today. As such, China resorted to devaluation but because the market expects the yuan to ultimately weaken by around 10%, the PBoC has been forced to manage expectations by supporting the yuan.

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