Pressure continues on China ???

Japan pressed China to reform the Yuan currency peg but stated that "flexible exchange rates were not a panacea for all imbalances threatening the global economy" according to reuters. China also stated that any FX move would be difficult when intense speculation was on the Yuan.

So what does that mean for the markets ? SELL DOLLAR ASIA ! Where there is smoke there is fire. The pressure will remain on dollar asia until something happens. Sure there will be pullbacks but until China moves on its currency (and a move is coming...I think in Oct) why would any FX trader risk being long dollars. I certainly will not. I will be short or neutral NOT LONG.

It seems to me that the market is looking for a slowdown in the U.S. economy. I am not so sure. I am looking at this as a "slow patch". Time will tell but it seems the FED believes the same as me and I am willing to bet with Mr Greenspan for now.

So to sum up ....Be short USD futures (I like being long Short Sterling against them).
Short Dollar Asia
Short Dollar Mexico
Short Forward Brazil.

These are my FX Trading Ideas for today.

Good Luck to all