The Yuan Remains the Same

Such minor changes won't have much impact as high oil prices are also keeping a lid on Asian currencies, Jen added. Because Japan and China import so much oil -- which is denominated in dollars -- the countries' growing energy bills are yet another mechanism for selling yen and yuan and buying dollars. Additionally, there are some, albeit a minority, who believe a revalued yuan wouldn't appreciate much vs. the dollar because of China's weak banking system and overstated growth.

Don't Believe the Spin

Still, that didn't stop traders from reacting to the rumors. On Tuesday, major bourses lost 2.6% in South Korea, 2.9% in Thailand, 1.8% in Taiwan and 1.3% in Japan. China's Hang Seng index lost 0.4%. The pressure also hit currency markets as the dollar weakened to 109.65 Japanese yen Tuesday from 111.5 yen last Thursday.

The messiness started last week when the Bush administration revealed that the president had called Chinese President Hu Jintao to push for an increase in the value of the yuan. Not surprisingly, the White House press office said Bush had extracted a commitment that China would move forward with a "market-based, flexible exchange rate."

It's a spin the White House has been dispensing for months, but it's not intended as market-moving information. Rather, the words are targeted at voters in the U.S. -- especially those in states that have lost millions of manufacturing jobs on Bush's watch, according to Guang Yang, manager of the (TEGOX Quote)Templeton Global Opportunities fund.

"When the administration talked to the president of China, the purpose was really to improve their election prospects," Yang said.

"The jobs lost to China were jobs the U.S. lost to other countries 10 or 15 years ago," he continued. "Even if China devalued 20% or 30%, the jobs would flow to Mexico or Thailand."