Guan Xiangdong, a reporter for the China News Service, is more
at home writing about tourism than about finance. But she was on duty in
Hong Kong last Saturday while her more financially savvy colleagues took the day
off. And, deciding to take the initiative, she put together a story on the impact of a
possible appreciation of the Chinese currency. Her sources: bits and pieces
of news and analysis gleaned from local newspapers.
Yesterday, her efforts roiled the world’s trillion-dollar-a-day foreign
exchange market and sparked panicky emails and phone calls among currency
traders and fund managers from Singapore to Stockholm as the US dollar
tumbled. The dollar later recovered against major currencies.
How a reporter for an obscure, semi-official Chinese news service managed to
set off such chaos – and losses for traders caught off guard by the
market’s gyrations – is a tale of the modern electronic news media gone
awry. Like the child’s game of Chinese whispers, Guan’s story hopped from one
news outlet to another, changing significantly along the way. It also
spotlights the jittery state of currency markets now that the US is
putting pressure on China to allow its currency to rise in order to help cut
China’s huge trade surplus with the US.
Read the full story here.
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I’ll write this up better if you guys like it – Ben…