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January 28, 2008

China yuan breaks through another technical milestone

China's currency the Yuan broke through 7.2 against the US dollar

the yuan broke through 7.3 Jan 1, 2008 and past 7.4 Nov 25, 2007.

Chinese yuan at 7.196 to the USD on Jan 28, 2008

The yuan finished at a new high of 7.1963 to the US dollar on the over-the-counter (OTC) market, following a record high of 7.2102 recorded on Friday.

With more US interest rate cuts it seems likely that this pace of appreciation will continue for several more months.

2 comments:

Tom Craver said...

But isn't this more a symptom of the dollar's general decline, than the Yuan in particular doing well?

bw said...

Yes, this is a symptom of dollar weakness, but the Yuan has been holding steady and solidified against the euro as well. The chinese leaders are allowing the strengthening. Japan has tried to weaken the yen allow with the dollar and China previously was trying to slow the pace of strengthening. Now because of inflation at 6% or so in China and perhaps to counter the higher oil price China is following a course of a stronger yuan. China probably also believes that it is better for a controlled appreciation than to try to hold it and then get overwhelmed by speculators.