China currency has hit a series of record highs

Published on in Foreign Exchange News by

Currency Rates Overnight/Morning Ranges:

Currency Rates EUR/USD 1.4324-1.4465

Currency Rates GBP/USD 1.6362-1.6462

Currency Rates GBP/EUR 1.1364-1.1452

China currency has hit a series of record highs against the dollar over the past week in a new strategy to deal with growing inflation rates.

As the cost of living continues to rise the China foreign exchange market are looking at ways to slow down the Chinese economy at a time of renewed global financial peril plus with a climb in the value of the yuan could see dollar-denominated imports like oil cheaper and may help to keep a lid on prices.

It would also have the added benefit of easing tensions with the US, where lawmakers complain the strong currency gives Chinese exporters an unfair advantage. China allows the yuan to move 0.5 percent on either side of a dollar trading midpoint set by the central bank each day but in the run-up to a high-profile visit by US Vice President Joe Biden, Beijing has allowed the yuan to strengthen to record levels.

But last week the units rose 0.8 percent against the greenback, and on Tuesday, the central bank set the currency’s central parity rate against the dollar at a fresh high of 6.3925.

The Euro initially traded weaker after Merkel and Sarcozy rejected any expansion of the € 440 billion rescue fund. They have set the foundation for tougher deficit rules on member states and eventual harmonization of corporate tax rates. Also proposed is that an `economic government’ be set up, this leading to closer fiscal harmony.

There is still much work to do going forward and pessimists suggest that another bailout is quite possible in the months ahead. With regards to Euro Bonds, they confirmed that `there would be a possibility, but at the end of closer integration, not at the start of’. To put it bluntly, there have been no immediate solutions to the deficit problems…Stock markets have responded negatively. Despite this, the Euro has recovered and is back to yesterday’s closing levels.

Sterling fell today after `dovish’  comments when the MPC minutes were released. The vote change from 7-2 to 9-0 in leaving rates unchanged as well as a reference to possibility of QE2 saw the Pound lose ground against the Euro (weaker employment data did little to help), but relatively unchanged versus the USD.


EUR/USD currently 1.4460. Support 1.4200, resistance 1.4500.

GBP/USD currently 1.6460. Support 1.6300, resistance 1.6600.

GBP/EUR currently 1.1383. Support 1.1350, resistance 1.1600.

Oil $ 87.25   Gold $ 1789

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