There is a plethora of information on the web about the Yuan revaluation and the effect it will have on the US economy. While it seems that the recent move is rather symbolic, rather than paradigm changing, the feeling is that this was the first step in China's journey to a free float. Higher interest rates, cheaper US goods, the Asian currency domino effect and capital inflows into China are all factors investors will have to keep an eye on and position themselves accordingly.
Most important to this board is the possible effect on oil prices. An article on Yahoo Singapore! believes the effect will be minimal as demand should weaken in China thus offsetting the lower oil prices a stronger Yuan will cause.
Comment: We can follow the train of thought that a stronger Yuan might cause China's industrial boom to slow down but we also think the thirst for oil will change hands going forward. Think of a baton being passed from one runner to the next. The recent boom in China has primarily been driven by the incredible amount of capital flowing into it and the building of a substantial foundation on which China becomes the globe's producer of goods. Our theory is that once the foundation is in place a rise in the middle class should occur (see the US in the 1950s). If Oil is 20% cheaper because of a revaluation whats to stop the Chinese population from buying and running the quintessential embodiment of success ---the automobile.