Roberto Abraham Scaruffi

Wednesday, 15 June 2016

The European Union Times

Posted: 15 Jun 2016 12:06 PM PDT

The Chinese yuan dropped on Wednesday to a five-year low against dollar. The Chinese Central Bank fixed the yuan exchange rate at 6.6001/$1 after on Tuesday the yuan closed at 6.5966/$1.
Analysts pointed out several factors that have driven the yuan down. One of the most important among them is strengthening the dollar on expectations of a referendum of Britain leaving the European Union. The vote will take place on June 23.
This creates possible risks for the Chinese currency market since Britain is the yuan-trading platform in the West. One of three Western European yuan clearing centers is located in London. Moreover, China’s sovereign yuan-denominated bonds have been listed in the British capital.
Analysts refrain from predicting the stability of this “British trend” of a weakening yuan. Despite the fact that Britain is highly unlikely to leave the EU risks and expectations would continue to drive the US dollar up and weaken the Chinese currency.
Some analysts see the recent step to devaluate the yuan as part of its correction ahead of the possible interest rate hike by the US Federal Reserve.
In this context, the policy of the Chinese financial authorities looks controversial, Nikita Maslennikov, an analyst at the Institute for Modern Development, told Sputnik Radio.
“Analysts cannot fully understand what Beijing is doing now. On the one hand, the government has repeatedly said it wouldn’t devaluate the currency in order to maintain exports and maintain growth. At the same time, recently the Central Bank has step by step decreased the yuan exchange rate,” he pointed out.
The expert suggested that this may be a signal to the Federal Reserve to postpone raising interest rates.
The Federal Open Market Committee will decide on June 15-16 on whether to raise the rate or not. The market expects that a hike is very likely.
On Tuesday, Morgan Stanley Capital International (MSCI) once again delayed including China’s mainland A-shares into the MSCI Emerging Markets index. By devaluating yuan, the Chinese government has responded to the frustrating move.
The MSCI published its rating at a difficult time of liberalization in the Chinese financial market.
The denial to include China’s A-shares in the MSCI index looks like an attempt by the West to undermine Beijing’s market liberalization efforts, Andrei Volodin, an expert in global economy at the Russian Academy of Sciences, said.
“The economic struggle against China continues. Western rating agencies want to weaken China’s influence on the global economy,” he said.
This is exactly what Trump is talking about during his rallies. China is manipulating global trade through its currency devaluations.
Posted: 15 Jun 2016 11:59 AM PDT

Police have identified the suspect who opened fire at a Walmart store in Amarillo this afternoon as Mohammad Moghaddam, 54.
Mohammad Moghaddam, a Muslim immigrant, came to Amarillo with his family eight years ago from Iran.
Immigrant services from Amarillo would not discuss with reporters whether they helped relocate the family to the Amarillo area.
Police say Mohammad was upset he was passed over for a promotion so he took his manager and another person hostage. He was shot dead by police.
ABC News reported:
Amarillo police say the armed man who took two people hostage inside a local Wal-Mart was a store employee who had a work-related dispute with the manager and that there was no reason to believe the incident had any ties to terrorism.
Police Sgt. Brent Barbee says the suspect, 54-year-old Mohammad Moghaddam, took his manager and another person hostage over a dispute related to a promotion. Barbee says Moghaddam was a current employee at the Wal-Mart store.
Police say officers responded to the incident around 11 a.m. Authorities say a police SWAT crew entered the area of the store where the hostages were located around 12:20 p.m. and fatally shot Moghaddam.
Barbee says Moghaddam was armed with a handgun.