US dollar advanced against the yuan on speculation of stronger than expected US Non-farm payrolls. The Chinese yuan lost 0.9 percent...

... against the US dollar, to close at
7.5753 on the exchange-traded session, on speculation that tomorrow we
may see a stronger than expected US Non-farm payrolls. Yet, Yuan 1 year
non-deliverable-forwards traded at 7.1623 to the dollar, anticipating
the yuan could be almost 5 percent stronger in one year's time. This
Friday, we are expecting July Non-farm payrolls and now more than ever,
the stability of the US economy hinges on the strength of the labor
market because non-farm payrolls could easily make or break it for the
US dollar. July Non-Farm Payrolls: Will it Hurt or Help the US
Dollar?

Chinese officials open to currency reform, Paulson said

Chinese officials are committed to currency elasticity and further
financial restructuring, former Goldman Sachs chief executive Paulson
said following his visit to
China. By going through diplomatic channels in his Strategic
Economic Dialogue the U.S. Treasury Chief hopes to avert legislative
actions to correct Beijings $235 Billion trade surplus with the
United States. Nonetheless, Paulson did not release the pressure on
China. Paulson expressed to the Chinese president Hu Jintao and Deputy
Prime Minister Wu Yi that a faster rate of appreciation in the Yuan
would be beneficiary to the Chinese economy.

Financial institutions are rushing in to capture the attention of the
1.3 billion people in China

Bank of East Asia, Hong Kongs third-largest bank by assets, reported
a 20 percent increase in net income from China. Consumer demand is
now emerging on the mainland, fueling demand for credit said Bank of
East Asia Chairman David Li. Surging equities and rising incomes have
stoked demand for financial services in the worlds fastest growing
economy. Financial institutions are rushing in to capture the attention
of the 1.3 billion people in China with an estimated $2.2 trillion in
household savings. Consumption on the mainland has also ticked up with
retail sales jumping 15 percent in the first half and overall loans for
cars, homes, and consumer goods expanding at the same rate.




DailyFX Research Team
Forex Capital Markets LLC
32 Old Slip, 10th Floor
New York, NY 10004
Tel (212) 897-7660
Fax (212) 897-7669
E-mail: research@dailyfx.com


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