Reserves Flat in October

Chinese forex reserves increased in October, but it was a rounding error of $700 million. The turn is at hand.

Reuters: China's Oct FX reserves rise slightly in ninth month of gains


  1. Hi, What do you think that means for the bearish China thesis? Are the risks gone for now? Or do you expect this to turn negative quickly?

  2. It all depends on the U.S. dollar. DXY looks like it wants to rally to around 97, June levels. The chart of the euro and emerging market currency ETF (CEW) show a similar move is underway to June levels. Things don't get serious unless/until DXY achieves a new high for this bull market, but dollar bears won't even get a little nervous until the DXY rally extends past 97.