Dr chan keep an eye on trump’s next move and the battle of the renminbi – aspire 1 usd to rub


Stock markets across the globe first surged before crashing heavily in the years 1987, 1997 and 2007. Now that it is 2017, will the “curse of the number 7” repeat itself?

Noting that the US stock market has now soared to historical highs, and coupled with the positive expectations that the market has for the new US president Donald Trump, we might indeed witness the “surge-and-crash” pattern yet again.

Having experienced such a phenomenon in 1987, 1997 and 2007, many investors do have high hopes for the stock market in 2017 algorithm for binary search. I think it is highly possible that the 2017 stock market can rise to unbelievable heights, but investor sentiment will ultimately determine the fate of the stock market.

If we were to look at the current valuation and yield of the Straits Times Index and the Hang Seng Index, which are way above 2007-levels, it is not unreasonable for stock prices to trade at levels higher than a decade ago.

The US Federal Reserve has raised interest rates two times in two years, with each hike by only 25 basis points. Even then, the interest rates are still considered low compared to historical levels.

We also saw that, after being elected, Donald Trump no longer criticizes Fed Chairwoman Janet Yellen for holding rates unchanged. I think, despite his criticisms during his campaign, Trump might not be truly supportive of rate hikes. His comments back then may be intended to infer that Yellen was aiding Hillary in the election, by means of holding rates accommodative in order to encourage economic growth.

As we have seen in the past, when US presidents were re-elected, Fed rates had always remained unchanged. In fact, there could even be rate cuts the year before running candidates get re-elected usd to chf. Now that Trump is about to be officially inaugurated, would he wish for America’s economy to collapse due to rate hikes? Odds are that he may probably be wishing that rates stay accommodative as well.

With one week left in his tenure as US President, Obama has seemed rather reluctant to hand over his presidential duties to Trump, who has beaten Obama’s “intended successor” Hillary Clinton. Thus, Obama is still determinedly displaying the last of his presidential power, repeatedly emphasizing on the American values that he upholds.

Recently, the United Nations has passed a resolution condemning further establishments of Israeli settlements on occupied Palestinian territory. Unlike the past where the US would veto anti-Israel resolutions, this time the US had chosen to abstain from voting instead.

After the resolution has been passed, a heated exchange of words ensued between Obama and Israeli’s prime minister silver chart. Amidst all the commotion, Trump appeared to decry the resolution and displayed support for Israel by asking them to “hang in there, as he is about to become the US president.” This show of support inherently implies that the Middle Eastern foreign policy under the US government may undergo drastic changes.

In terms of military prowess, Israel is far superior to its neighbouring Middle Eastern countries. For the past eight years, Obama had to play a counterbalance to maintain regional peace in the Middle East. If Trump were to completely overhaul the US’ foreign policy for Middle East and egg on the Israelis to expand its colonies in the occupied territories, will Arab countries just sit by and watch? If a war breaks out in the Middle East, oil and gold may become targets of speculation currency converter usd to pounds. In the event of it, Singapore’s oil drilling business may also see a revitalisation and rebound.

Coming back to the US, American investors are hoping to see substantial tax cuts during Trump’s presidency. Significant tax cuts will help increase corporate profits for both private and public listed companies. Under this circumstance, US stock prices should also rise in tandem. But note that, this would mostly be applicable to US companies convert cny to usd. For Singapore-listed companies, unless they have operations within the US, they are unlikely to benefit from such policy.

In addition, American households will also see an increase in their disposable income and thus, induce their spending and consumption. Ultimately, this will be another driver for the US stock markets.

It is also expected of Trump to invest heavily in infrastructure projects. Despite being technologically advanced, the US still does not possess a high-speed rail network. As such, the US would likely need to bring in the related technology externally. Investors should consider buying into Japanese bullet train stocks or Chinese railway stocks, since they are most likely to clinch the deals from US.

Adding on, infrastructure developments also require large amounts of natural resources such as iron, steel, copper, aluminum and cement size of futures market. Thus, investors may also wish to keep an eye on related stocks as well.

Meanwhile, Trump will also likely put pressure on international trade matters as he hassles for better trade terms for the US. Unfortunately, this is pressure to Singapore’s enterprises, as renegotiations have not occurred, and its effects are yet to be seen. For Singapore, this means tremendous uncertainties going forward hence local investors should also expect that Chinese companies listed in Singapore will face similar pressures.

Over the past few years, a number of international banks have been prosecuted by Obama’s Justice Department and each faced very hefty fines idr to usd conversion. If such prosecutions come to an end, America’s financial sector has much to thank Trump for. In fact, some of US financial stocks have surged more than 30 percent since Trump was elected.

On immigration issues, Trump will step up on US immigration security and has promised to deport as much as three million illegal immigrants. This would also trigger some form of labour shortage and hence, drive up salary and inflation. This might be another element that can boost the US economy.

Moving on to China, we have seen that the Chinese foreign exchange reserves has fallen to about US$3 trillion, from US$4 trillion a year ago. The substantial decline was likely due to a large number of Chinese people exchanging their Renminbi for other countries’ currencies conversion of euro to usd. The depreciated Renminbi was the main reason driving the Chinese to swap their Chinese currencies for other currencies. Although some high-ranking Chinese officials have claimed that the Renminbi is the world’s second strongest currency, people are more inclined to go for the strongest, which is the US dollar.

For the past few months, the battle to defend the Renminbi has been ongoing. On one hand, China seeks to preserve the outflow of the Renminbi. On the other, it also needs to curb speculations and prevent speculators from short selling Renminbi futures.

In order to prevent the outflow of the Renminbi, the Chinese government has adopted several measures. For instance, utilizing credit cards for purchasing insurance are prohibited. Making overseas investments are also heavily scrutinized and subjected to questioning 200 usd to euro. In one of its latest move, individuals may no longer freely exchange for US$50,000 equivalent of foreign currencies. Such requests must be made in formal applications, and still subjected to review by the central government.

Furthermore, it is also stated that the foreign currencies cannot be used to purchase foreign properties or stocks (though the restriction does not apply to the Shanghai-Hong Kong and Shenzhen-Hong Kong stock connect). Even using of foreign currencies to study aboard is also regulated. In the meantime, the Chinese government has also actively clamped down on illegal channels that funnel Renminbi for foreign currencies.

In its other intent to prevent “financial crocodiles” and big players from short selling the Renminbi, a way is to deplete the supply of Renminbi in Hong Kong sprint troubleshooting. This would allow the Chinese currency to appreciate drastically outside and thus, increase the cost for speculators who short-sell the currency.

Such a move was effective, at least temporarily. At one point, the exchange rate rose to less than 6.8 Yuan per US dollar (from 7 Yuan previously). However, curbing the speculative activities has also proven to be tough, as the Renminbi quickly readjusted itself after just two days.

As the battle to defend the Renminbi goes on, I don’t think the Chinese government can continue being a “one-trick pony” in the long run. I also do not think there is a “lowest point” or “support level” for Renminbi in this defensive battle.

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