I really shouldn't spend much time on this folly. Another statement of a change in currency policy? We watch this exquisite dance performed each time the US is tasked with the decision to label China a currency manipulator.
The model for the upcoming shift in currency policy is China’s move in 2005, when the leadership allowed the renminbi to jump 2 percent overnight against the dollar and then trade in a wider daily range, but with a trend toward further strengthening against the dollar. For the upcoming announcement, however, China is likely to emphasize that the value of the renminbi can fall as well as rise on any given day, so as to discourage a flood of speculative investment into China betting on rapid further appreciation, they said.
The Obama administration is likely to take credit for whatever happens. But when you hear a loud pop and feel hot air on the back of your necks, you will know the announcement has been made.
