It's been widely rumored that the Fed is cut the rate by quarter point today, bad news for us savers. Now it's likely the CD rate is going to be below 4% APY.
Thinking about exchange rate, Chinese Yuan to US Dollar dropped from 7.8 yuan/dollar in January to 7.5 yuan/dollar in October. Assuming the trend is linear, this means, by the end of the year, the exchange rate is 7.44 yuan/dollar. This means if I put $100 in to Chinese yuan, by the end of the year, I am going to have $104.84, almost 5% .
Looking forward to next year, make a big assumption that yuan to dollar drops at the same rate, so it drops from 7.44 yuan/dollar at the beginning of the year to 7.08 yuan/dollar at the end of the year, $100 in the beginning is going to be $105.09 in the end, more than 5%. In the current CD rate situation, it's definitely more worth-a-while to invest in a mutual fund which yields 10% or even foreign exchange. BTW, invest in Euro is almost 10% this year.
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