SHANGHAI: At a time when the world's top athletes strive to set records at the Beijing Olympics, the Chinese currency has unexpectedly put on hold its steady move towards new highs.
Over the past nine trading days, the yuan has declined against the US dollar six times, throwing into doubt the conventional wisdom that its strengthening was the inevitable result of China's rise as an economic world power.
As a result, the yuan has declined nearly 0.70 per cent against the American currency from a closing peak of 6.8113 hit on July 16, ending at 6.8588 on Friday.
The markets appear to be betting that this is more than a short-term phenomenon.
Although the US dollar has generally strengthened on a global scale, this may only be part of the explanation of why the yuan has weakened.
Subtle changes in the economic conditions facing China may be the real reason, according to economists.
However, amid the deceleration in the appreciation of the yuan, some economists see this as a minor bump on the road of the Chinese currency to new heights.
"The arguments in favour of appreciation pre-date recent concerns over inflation. Simply put, China cannot rebalance its economy with a severely undervalued currency. We expect rapid... appreciation to continue," Capital Economics analyst Mark Williams said in a research note.
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My opinion:
Amid my time breaks off the TV catching up the Olympics, i went for toilet reliefs.
Having more time, i read up more news.
The above article, came to my attention because of the Olympics. I always been discussing with friends, How Olympics might bring about any impact to China and its economy. Of cause, we all agreed There can only be good musical notes for China, a country monopolizing the world's manufacturing industry.
From Apple to Ikea to Nokia to Sony to the smallest screws and nuts we use everyday at home, nothing escape CHINA.
In just 10 years, China has clocked the fastest economy producing the fastest growing number of Millionaires each year.
Yuan suddenly appreciates against USD, unlike the past. With that, there was a surge in CHINA FUNDS...
I bought 1. DWS CHINA FUND....
Just like gambling, the moment i bought , it rises a couple of hundreds for me.
I got greedy, and suddenly one fine morning, the prices changed.
SUB-prime crisis hit worldwide.
CHINA FUNDs not avoided.
Fundamental of YUAN for me to USD ? I will be answering by saying that the value of the YUAN lies in the diligence of its people. The CHINESE. The appreciation does not ends here. In fact, the last few weeks of depreciation against the dollar. Was indeed surprising and welcoming for lots of speculators. They started buy YUAN or SELLING USD.
thats my opinion too.
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