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The Yuan collapsed; 7 for a dollar is close



Value of Chinese Yuan drops for a third week while dollar is climbing against almost all other major currencies.



25.Nov.16 3:35 AM
By Anna Tuzova
Photo Toinnov.com

   198

The Yuan collapsed;  7 for a dollar is close

This week Yuan was devalued by 0,4 percent against the US currency  to 7 USD. In November the Yuan fell by 2%.

The Yuan has grown up to three months maximum against major trading partners countries currencies, although the reduction against dollar means the greatest slump since serious devaluation on August 2015.  The price of the Yuan in Shanghai is about 6,9156, in Hong Kong the price is 6,9405. Difference between a fixed and a market price is more than 0,6 % which is maximum for two weeks.

Fixed price is 6,9085 which is minimum since June 2008.

The expectation of  USA’s tightening of monetary policies as a consequence of Trump’s reflating policy has affected markets worldwide. At the moment there’s a 46 percent possibility of the Yuan falling below 7 for a dollar. Two months ago the possibility of this fall was twice lower.

According to analytics, the Yuan devaluation is reaction of the People’s Bank of China on the situation in the global economy.

According to Goldman Sachs, the Yuan collapse may continue in the nearest future. However, Beijing’s most important problem is not to let capital flight to increase, otherwise the devaluation will intensify and markets would covered with chaos.




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