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Trinh Profile picture
@Trinhnomics
Oct 4, 2020 • 7 tweets • 2 min read • Read on X
a) He is saying that this is EURCNY moves, which means CNY tracks DXY, which is roughly 60% EUR

b) China did this since 2015 b/c EUR went on sale vs USD & CNY in 2014 massively (JPY too) in a form of FX war & so devalued to not be too expensive

c) The dollar 💵 remains king 👑
The dollar being King 👑 has nothing to do with it being up or down but rather how much of that is being traded.

As in the value of a currency doesn’t tell u the volume of internationalisation.

What holds the CNY or CNH back is China’s capital controls not the USD.
Once a while u get people writing the rise of the red back blah blah & the currency will be fully convertible in say 2 years.

That has been a moving target for a decade now.

Unless China wants to let it go, as in let go of capital control, dollar is king.
Most of China merchandise trade is denominated in USD.

The demise of the dollar is an age old theme but people mistake the value of the dollar for the volume, which is what really makes it king, not the value.

The Fed wants the value of the dollar to fall. Volume still high.
Let me put this another way, unless there is an alternative to the dollar, it remains king.

Btw, the EUR was created to usurp the USD. How do I know this? I read the book commissioned by the ECB & BIS.

This has been tried before. China is not trying to usurp the USD like EUR.
If it did, it wouldn’t put more and more barriers to trade the yuan.

How do I know? Why don’t u try to move some yuan in & out of China.

See how easy it is. It isn’t. And that is by policy design.

How is that gonna usurp the USD?
And no, Bitcoin is not the future & isn’t gonna usurp the USD either.

Volume too low & too tiny.

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More from @Trinhnomics

Trinh Profile picture
Apr 19
Who likes higher fuel prices in Asia??? Well, no one except Indonesia and Malaysia and by that I mean exporters.

The biggest deficit as a share of GDP goes to Thailand but mostly in LNG. Second is South Korea.

Obvs this is as a share of GDP. Higher fuel costs = higher import costs = someone has to pay for it & eg higher inflation or higher fiscal costs.Image
Who likes higher food prices? Well, a few - Thailand, Malaysia, Indonesia, Vietnam and India. Obvs this is EXPORTERS only who gain. EM has high food as a share of consumption basket. But net food exporters have levers to pull. They can BAN exporting of food.

Who is most vulnerable? The Philippines. South Korea imports a lot too.Image
Putting food and fuel together as a share of GDP: Who is most exposed?

Well, South Korea and the Philippines. KRW doesn't like this news.

PHP doesn't like it. One caveat is that SK is much richer so can afford it more than say PH where this will hurt more.

Winners? Malaysia. Yes, Malaysia.Image
Read 4 tweets
Trinh Profile picture
Apr 12
Good morning,

Did you know that South Korea exports more to the US now than it does to China?

Actually, it isn't alone. A lot of Asian countries, due to supply chain reshuffling and also geopolitics and industrial policies, are exporting now more to US than China.

Why is South Korea doing more trade with a country far away than a country next door?Image
First, growth of exports to the US is faster than exports to China. In fact, China hasn't been importing much more and it is Korea that has been importing more from China for goods such as intermediate goods etc.

This has raised a big concern in Korea that China is a competitor & it's hard for SK to compete with its industrial policy and subsidies.Image
And so South Korea has 1 lever it can pull that is better than China - GEOPOLITICS. South Korea is an ally to the US. And as a country w/ a US FTA, it is being favored.

Whether it's the Chips Act or the Inflation Reduction Act (IRA), the whole point is to exclude China.

So what?
Read 8 tweets
Trinh Profile picture
Feb 8
Another Five Years of Jokonomics? More Infrastructure, Metals and Mining FDI, and Even Greater Dependency on China

A thread 🧵
Image
Indonesia elects a new president in a week. The leading candidate is riding high on Jokonomics, or the continuation of his policy & popularity, as Jokowi's eldest son is VP.

Prabowo promises 8% average GDP growth or Jokonomics. How realistic & what is Jokonomics anyway? Image
While people believe that Prabowo is the best bet of doing more of what popular Jokowi has done for Indonesia in the past decade & he promises the highest growth, Jokowi 10-year only produced 4.2% GDP growth on average. Stripping out 2020 (Covid), it's 4.9%. No where near 8% 👈 Image
Read 26 tweets
Trinh Profile picture
Feb 6
Indonesia elects a new president next week to replace Jokowi. The leading candidate - Prabowo - is riding the president's coat tail as many hope that he is the best hope for continuation. But what is Jokonomics exactly? From 2014 to 2023, Indonesia grew on average 4.2% per yr👈.
If we strip out 2020, which economy contracted, then under Jokowi, the economy grew 4.9% on average (4.2% if we don't strip it out).

So that's sub 5%. In fact, GDP barely deviates from 5% level. So why do people think that Prabowo is the key to escape the middle income trap?
Pres Jokowi's biggest accomplishments come from the fiscal side. Indonesia got investment grade in 2017. By weaning Indonesia slowly off expensive energy subsides, the expenditure side was contained. And with the commodity boom, Indonesia fiscal positions were leaner than most.
Read 12 tweets
Trinh Profile picture
Feb 2
Today is 2 Feb and we're basically two years since the Fed started hiking rates in March 2022.

So what you say? Well, since then, Asian FX has lost grounds to the USD, except SGD & HKD.

JPY lost -21.5%
CNH -12.1%
MYR -11.4%
TWD -10.2%
KRW -9.4%
INR -9.2%
AUD -9.1%
IDR -8.7%
What we know is that the Fed took rates from 0.25% to 5.5% or +5.25% increase, which is the sharpest since the 1980s of tightening cycle.

On top of this, it also has to wean down its massive balance sheet (BS) by letting 60bn UST & 35bn MBS roll off.

So what? Well, USD rallied.
People thought that in 2022, the Fed would only hike ever so meagerly but it kept going.

People thought that in 2023, the Fed would CUT because, well, the economy would crack but it kept going until July 2023 at 5.5%.

People thought that the Fed would CUT in March 2024 but...
Read 8 tweets
Trinh Profile picture
Dec 21, 2023
As we bid adieu to 2023, which was an abysmal economic year for EM Asia (India an exception), hope springs eternal as we look to 2024 with key drags dissipating.

A thread 🧵👈

bloomberg.com/news/videos/20…
The great expectations of China lifting the region via imports and tourism disappointed as demand faded, weighed down by property market woes & weak investment.

From Korea to Vietnam, exports to China crashed, dragging down overall shipment, hurting big traders the most. Image
The goods deflation felt globally, especially in ICT, hit big traders hard. Commodity exporters such as Indonesia too didn't like the downward price trend.

Despite stronger US growth, China downward import growth dragged Asian exports.

India not being a bit trader helped shield Image
Read 14 tweets

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