China allowed the Yuan to sharply rise 0.24 % today against the US dollar, to its own hurt, sending a warning signal to the US. Chart below shows the abrupt move. A Yuan, fully-unpegged from the US greenback. would be a step towards a new reserve currency.
Zero Hedge
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Chinese Yuan, opening August 8th. |
Would you trust the currency of a people that saves over
50% of GDP? China has determinedly kept the Yuan low to help exports, although this year's
Big Mac Index suggests it is not as undervalued as protectionist US politicians think.
Update August 9th: "China doesn't rule out normal market operations" "China considers allowing private companies to purchase foreign exchange with the yuan" " How does that work without China floating the Yuan? Precisely."
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