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CHINESE REVALUATION SAGA CONTINUES
BlueGold Capital Management’s Stephen Jen said yesterday in a client note that China may refloat the yuan next month to counter the criticism that it is giving its exporting firms an unfair advantage. A revaluation “should help diffuse much of the risks associated with trade protectionism and allow China to resume building the institutional framework necessary to conduct monetary policies independent from those of the Fed”, said Jen.

DARLING: POUND’S FALL IS HELPFUL
Appearing in front of the Treasury Select Committee yesterday, chancellor Alistair Darling said that the fall in the pound is helping the UK economy. UK net trade has not yet picked up but this may be due to weak demand in European countries, which saw stagnating growth in the fourth quarter of last year. However, Schroders said the UK could become the next target for bond vigilantes after European officials extended support to Greece.

UBS RECOMMENDS BUYING EURO-YEN
Analysts at UBS said yesterday that investors should buy the euro against the yen because the single currency will strengthen as the economy improves. A target of ¥130 was recommended by the analysts. Pressure on the euro eased after a support package was agreed for Greece. Investors should buy at ¥125.22 with a stop loss in place at ¥122.80 in case the euro weakens further.