Dollars, Euros, and Yuans

I just want some clarification on this here. As we all know, the value of the dollar has been plummeting due to the deficit. Now, let's say I exchange my US dollars for Euros or Yuans. I'm under the impression that I will lose money if I exchange for Euros and gain money if I go for Yuans.

If the above is true, how much do I gain by taking the Yuan route and how much do I lose if I go the Euro route?

Bah, I wish I could just move to Europe, but it doesn't look like that's happening soon.

[edit on 6-12-2004 by Blackout]

Can't answer your question but I'm glad to see you brought up the "Y" word. The basic monetary unit of China will continue to rise as their gov't allows their economy to come into the 21st century.

Originally posted by Blackout
I just want some clarification on this here. As we all know, the value of the dollar has been plummeting due to the deficit. Now, let's say I exchange my US dollars for Euros or Yuans. I'm under the impression that I will lose money if I exchange for Euros and gain money if I go for Yuans.

If the above is true, how much do I gain by taking the Yuan route and how much do I lose if I go the Euro route?

Bah, I wish I could just move to Europe, but it doesn't look like that's happening soon.

[edit on 6-12-2004 by Blackout]

The Yuan is currently pegged to the US Dollar (around 8.3 Yuan per dollar), so there is virtually no fluctuation in exchange rates and no loss/gain for exchanging currency. The U.S. is trying to push the Chinese to allow their currency to float freely because it is artificially undervaluing the Yuan--some believe by almost 40%. It is also artificially propping up the dollar--by un-pegging the Yuan, the dollar would fall to it's natural level because the Chinese would dump their massive reserves of US dollars (as would the other Asian countries that are holding dollars to keep the value of their currency high.) The U.S. government has stepped up it's pressure on the Chinese, but there is no telling when the Chinese will change to a market-based valuation. It will happen eventually (and sooner, rather than later), so holders of the Yuan will get a big payday when it does.

Compared to the Euro, the US dollar value has been declining because of inflation. Basically, this means that Europeans will flock to the U.S. because it will be cheap to travel here and buy our stuff, but for Americans, it means that anything that comes from Europe will be more expensive--including travel overseas. Currently, one Euro costs $1.34--at the beginning of the summer, a Euro cost $1.20. This is also true for the British Pound, which is about $1.94 dollars--a 12-year high.

However, moving to Europe probably isn't going to save you any money. You also have to consider that prices are also in-step with currency ratios--prices in London, for example, are about twice that in New York. Europeans, however, will save a ton of money doing their Holiday shopping in the U.S.--cheap flights and cheaper prices. There are so many Brits in NYC these days for that reason alone.

Originally posted by lmgnyc
The Yuan is currently pegged to the US Dollar (around 8.3 Yuan per dollar), so there is virtually no fluctuation in exchange rates and no loss/gain for exchanging currency. The U.S. is trying to push the Chinese to allow their currency to float freely because it is artificially undervaluing the Yuan--some believe by almost 40%. It is also artificially propping up the dollar--by un-pegging the Yuan, the dollar would fall to it's natural level because the Chinese would dump their massive reserves of US dollars (as would the other Asian countries that are holding dollars to keep the value of their currency high.) The U.S. government has stepped up it's pressure on the Chinese, but there is no telling when the Chinese will change to a market-based valuation. It will happen eventually (and sooner, rather than later), so holders of the Yuan will get a big payday when it does.

That's what I'm interested in. How large is this "big payday"? How much is a Yuan worth in terms of US Dollars?

Compared to the Euro, the US dollar value has been declining because of inflation. Basically, this means that Europeans will flock to the U.S. because it will be cheap to travel here and buy our stuff, but for Americans, it means that anything that comes from Europe will be more expensive--including travel overseas. Currently, one Euro costs $1.34--at the beginning of the summer, a Euro cost $1.20. This is also true for the British Pound, which is about $1.94 dollars--a 12-year high.

Well you've answered my question. Moving to Europe is still way out there at the moment since I'm still saving up for a lot of other things. I hope to be moving to Europe within 3 years (if not sooner). Hopefully, martial law and other such conspiracies won't take effect within that timespan...

Yuan is currently pegged with the dollar

however, many people are stocking Yuan in the black market as they believe that the Chinese government will change its policies eventually

If we are talking about futures market with margins, even a few percentage change in Yuan could translates to huge profits

However, that's if the Chinese government changes its policies
I dont think that ll happen until the Chinese financial system is completely (at least overwhelming majority) modernized

because as of now, many bad loans from the past are till outstanding and floating the currency, even within some range, can induce a currency crisis if enough speculation occurs

since that's what happened in the asian financial crisis, China will not be stupid to repeat it again

so we will wait and see

[edit on 7-12-2004 by white_raven0]

You would recieve a less amount of euros if you exchanged them for dollars but they will be worth the same