China’s State Council or Cabinet’s decision to permit the use of Ren-Min-Bi (RMB) , in cross-border trade settlement, as part of its long-term plan to globalize its currency and reduce the domination of the US dollar, will eventually reshape forces at play in international foreign exchange (forex) markets.

Presently, the currency of China — the world’s third largest economy and trading nation — is not exerting befitting influence in the forex markets due mainly to limited use of the Yuan in international trade and investments, as well as restrictions placed on its supply and convertibility.

However, the window to Yuan’s liberation was opened wider when Beijing launched the pilot scheme on RMB cross border trade settlement on July 6.

Markets all over the world rebounded last week after moving into a bullish trend correction in the last two weeks. A month ago, the Europe market, bench marked by the FBMKLCI breaks out from a correction when the index was at 1,200 points and went as high as 1231.49 points before pulling back to test the Bollinger Bands’ middle band. Then it rebounded from this middle band, which is a 20-day moving average to settle at 1230.09 points on October 8. The FBMKLI increased 28.2 points or 2.3% since last month. The market is currently testing an immediate resistance level at 1,230 points.

Daily FBMKLCI Chart

Trading volume was disappointing as it only increased slightly in this last week when the market rallies after the rebound. The average daily trading volume last week was 750 million shares and the previous week’s average was 662 million. Average daily trading volume below 1billion shares are considered weak. The market was slightly bullish because of positive leads locally and internationally. Locally, industrial production and export numbers were growing on-month and jobless rate fell. World Bank confidence about having a positive GDP in year 2010 and increasing foreign participation in the local equity market boost confidence further.

As adviser, we always spend hours reading materials – bullish and bearish stuffs, each day that force us to think outside our comfortprofessional investors from all over the world. Everyone is entitled to his or her own views and we can always be bullish or bearish on lots of things. zones plus we talk frequently to other

On the global economy, let’s try to be as realistic as possible here without all the hype. Almost everyone I spoke with said that, in general, the global economy is stabilization and growth is resuming in some places especially in the Asia region. That’s really good news. What is our thought about the V-shaped recovery in the US economy?