Chinese Yuan Reaches High Not Seen for Almost 19 Years
Chinese yuan is higher against the US dollar, gaining to its greatest value in almost 19 years. With so much weakness around the globe, pressure is high enough that China had little choice but to let the yuan appreciate.
Earlier, the Chinese yuan (also called the renminbi) reached 6.2371 against the US dollar, an intraday high not seen since 1994, at the launch of China’s new currency trading system. Yesterday, the People’s Bank of China set the central parity rate against the greenback as 6.2992.
China has been inching closer to letting the yuan float more freely on the global currency market, but the truth is that China retains a lot of its trade superiority with the help of keeping the yuan lower against the US dollar and other currencies so that its goods are cheaper.
However, the yuan has little choice but to improve. Around the world, major currencies are engaging in quantitative easing. The Federal Reserve, ECB, BOJ, and BOE have all been applying quantitative easing measures to help stimulate their economies. With these weaknesses, and with optimism growing for China’s economy, it is little surprise that the yuan is on the rise.
At 13:15 GMT the yuan is at 6.2416 against the US dollar, as well as sitting at 8.0876 against the euro and 10.0304 against the UK pound.
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Earlier News About the Chinese Yuan:
- Yuan Rises as Manufacturing PMI Improves (2012-10-24)
- Yuan Rises as PBoC Sets Fixing Higher (2012-10-17)
- Yuan Slides, Can Negative Data Lead to Rebound? (2012-08-10)
- Yuan Declines on PMI Figure (2012-08-01)
- Surprise from China: PBoC Lowers Interest Rates, Yuan Falls (2012-07-05)