Does Anyone Care About A Weak Yuan?
Mike Paulenoff | Aug 31, 2016 01:01PM ET
The next G-20 Summit is scheduled for Sept. 4-5 in China, which is interesting if only because the Chinese yuan has weakened precipitously vs. the USD in the past week or so.
On Aug. 22, the pair was trading at 6.59, but mid-day Wednesday it was at 6.68 -- just a few ticks from its July 13, multi-year USD high (yuan low) at 6.71.
So is China sending the Federal Reserve a signal -- if it raises rates, China won't allow the CNY to be dragged up by the USD and will instead manipulate its currency lower to help the Chinese economy? And if so, does anyone care?
Ahead of the G-20 Summit, should we worry about the yuan's weakness?
From a technical perspective, USD/CNY looks like it just started a new upleg that points to 6.80 next -- a 3.3% advance that will press yuan to levels last seen in June 2010.
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