Chinese Currency Rises

The New York Times reported on August 11 that China’s currency was responsible for a slight but unexpected rally in currency forex trade markets this week, as the nation’s central bank allowed it to increase 0.72 percent against the dollar. According to the article, the State Administration of Foreign Exchange, stepped in and changed the trading value Thursday under 6.4 renminbi to the dollar.

Every currency trading broker is paying attention to the new right now as economists have predicted the new trading value could be a sign that the central bank might be willing to allow a faster rate of appreciation against the dollar. If the renminbi continues to strengthen, it can help China battle inflation by making imports cheaper. However, a stronger renminbi might also hurt exports and employment at China’s factories, according to the New York Times.

Although the government’s National Bureau of Statistics released information Tuesday that inflation in consumer prices had reached its highest level in three years, 6.5 percent in July, China’s exporters are demonstrating unusual strength. It just shows that there is always room to learn forex no matter how long you’ve been trading.