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Currency Reserves Drop As China Manipulates Yuan Up In Value

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Currency Reserves Drop As China Manipulates Yuan Up In Value

Currency Reserves Drop As China Manipulates Yuan Up In Value*/

The Next Great American Metropolis Is Taking Shape In TexasOne of the standard talking points of Donald Trump and some others on the American right is that China is a currency manipulator.The argument goes that China uses the dollars earned from exports to purchase American bonds, or perhaps just stores the currency, this means that the yuan is cheaper than it should be.That, in turn, means that Chinese exports to America are cheaper and that’s how the American economy gets screwed.
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Goldman Sachs Sees China Using Fixing to Strengthen Currency

Goldman Sachs Sees China Using Fixing to Strengthen Currency*/

China’s central bank has altered its yuan fixing mechanism since the U.S. presidential election in favor of a stronger currency as capital outflows mounted and President-elect Donald Trump threatens to adopt protectionist trade policies, according to Goldman Sachs Group Inc.Before Nov. 8, broad dollar moves and the closing yuan price explained 90 percent of the next day’s yuan fix, validating the government’s publicly-announced methodology, strategists led by Robin Brooks wrote in a note Monday.The correlation has since fallen to 80 percent.The People’s Bank of China sets the fix daily and lets the yuan move 2 percent of either side.
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Bears Scramble for Yuan as China Chokes Flows, Aids Currency

Bears Scramble for Yuan as China Chokes Flows, Aids Currency*/

China’s efforts to choke capital outflows are beginning to pay off, with the offshore yuan surging the most on record as traders scrambled for a currency that’s becoming increasingly scarce outside the nation’s borders.The yuan gained 0.5 percent at 6:48 p.m. in Hong Kong, taking its two-day move to 1.8 percent, poised for its biggest gain in data going back to 2010.The overnight deposit rate in the city rose as high as a record 100 percent, while the spread between the offshore and onshore exchange rates reached the widest since 2010.
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