What’s in the Bag?
You know that the Chinese floated the Yuan, and from now on, the Yuan will float against a basket of currencies. The odd thing is that our major financial institutions think they know what’s in the bag, but judging by their answers, they don’t!
In Why is “BASKET” of currency for Chinese a mystery? at CONTRARIAN ADVISOR MARKET COMMENTARY, here are some of the possible answers courtesy of Reuters:
DRESDNER KLEINWORT WASSERSTEIN - 70 percent dollar share and 15 percent each for euro and Japanese yen
UBS - 70 percent share, the Japanese yen a 20 percent share and the euro a 10 percent share
BANK OF NEW YORK - the euro, yen and the dollar would be given an equal weighting of 20 percent each and the Korean won and Taiwan dollar would have 10 percent each.
There are many more estimates, but you get the drift.
The question again is why the mystery?
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