As the world’s worries are elsewhere, down she goes:
We know that Chinese iron dropped 50mt or so at $40 last year. Now that price is -8.9% lower at $36.44.
The number one looming competitor for Aussie iron ore is not Brazil it’s China. Bloomie says it’s nearly over:
After its worst quarter on record, the yuan may finally be headed for a break.
The People’s Bank of China will hit the brakes on depreciation to avoid sparking global volatility and exacerbating capital outflows, according to Svenska Handelsbanken, the currency’s top forecaster. The case for an end to yuan weakness is supported by its impending entry into the International Monetary Fund’s reserves basket in October as well as a dovish Federal Reserve spurring dollar declines, says JPMorgan Asset Management.
“They will take a breather now and celebrate that they have managed to depreciate the yuan without creating too much noise and without creating too much capital outflows,” said Bjarke Roed-Frederiksen, a Copenhagen-based economist at Handelsbanken, the most accurate yuan forecaster tracked by Bloomberg over the last four quarters.
My answer is who cares? It may end for now. But it ain’t over!
