May 1^st, 2007:Till now most of supplies in global trade being sourced from South East Asia (read China, Thailand, and other neighboring countries) or some from West Asia as India and Pakistan. China had been successively gaining edge in most trades such as Furniture, garments, shoes, ipods, gaming, electrical devices etc because of the state owned currency rate, which so far, China has not allowed to be market determined.

With now dollar ruling at about nine year low with Indian Currency would it lead to new business equation? Exports from India are definitely going to be more favorable now as Dollar has slipped to nine year low w.r.t. Indian Rupee. As it is, in many segments as furniture or garments, India had very low share compared to Chinese share. Is present valuation of dollar or Yuan real or is being manipulated to effect the global trade as for so long, despite growing European and north American Pressure, China refused to revalue Yuan to its natural position, it is US way of putting Chinese currency at a right place. Presently when jobless rate in US is slipping to its 6 year low, US economy should be resilient and dollar should not have moved to such lower levels.

Following the sudden devaluation of US dollar with respect to many currencies has already upset the calculations of many exporters who had insisted on payments in dollars and had paid hedging premiums too.

On the Japanese frontiers too Japan sat tight on monetary policy announced on April 10th, reluctant to follow up on its February interest rate. As a effect of keeping low interest rates regardless of economic conditions could prompt yen weakness and may cause distortions in global trade imbalances where by more trade could shift to Japan.

In a strange twist of logic, on the European markets front, Euro has staged smart recovery. This is apparently done by dumping gold and stocking up euros. What is really emerging now in the world global trade that a little tinkering with the domestic interest rates leads to substantial movement in its currency price. It would be worth watching the impact of new aligned currency rates in the global trade shares.

As for me, I am bullish on Chinese as no body could beat them on prices front and they remain competitive by a significant margin. To my mind the race would be from 2^nd to 5^th slot.

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