Interesting article in the New York Times. I have been citing China and the Olympics as a possible reason in the decline in oil. Maybe I am right, maybe I am wrong and have the casuality messed up. I would not underestimate it though.
Many Chinese have been expecting a post-Olympics economic slowdown, but it has already started and the Games have not even begun. Chinese factories reported a plunge in new orders last month. Exports are barely growing.
But this is what I find really interesting
For example, after letting China’s currency rise sharply against the dollar in the first half of this year, China’s central bank has actually pushed it down against the dollar in each of the last four trading days, including a decline of 0.13 percent on Monday. This is helping to preserve the competitiveness of Chinese exporters in foreign markets, although at the risk of angering the United States and other trading partners.
That could have broad ramifications if that is a new policy to keep down their currency.