I don't really know how significant it is. At a guess, I'd say quite but not very, if only because those predicting it means the death of America tend to sound like they're making a wish.
Anyone here who knows what they're on about (3underscore? robjc?) care to enlighten us?
I don't really know how important it would be. I mean, currency markets and everything are efficient enough as it is, so the currency would be a significant perceptual change but that is all.
Vimothy's remark that oil at $97 is partly true, but absurd in ways as well. Oil has moved due to reserves, a storm over oil refineries in the North Sea, the kurd situation. The dollar being weak doesn't help, but if you wanted to buy some vol this year, you would have bought oil (20% move) versus the USDEUR (5%) or cable (5%). So, really, it has little to do with FX and a lot to do with oil.
The moving of China's reserves is a big big deal, but has been discussed before and is discussed very often. Especially when the markets are as nervous as they are (the Dow has had I think 9 100-point moves in the past 13 sessions - crazy vol). While I do see that the Chinese reserves moving would be negative for the US, I am fascinated to see where it goes. China makes the Dubai lot look like they are small players if they start investing in infrastructure or other items.
The more I think about all this, the more I get worried about China post-olympics and what will come with that. The country is clearly rigged to look good all the way to 2008, and I have to wonder what kind of mess will result at the end.