Dollar trouble: Is China priming for a dollar take down?

GREETINGS,

  EVEN THOUGH THIS MAY SEEM LITTLE IN THE EYES OF PEOPLE WHO ARE NOT INFORMED ON MARKET MOVES AND MARKET MOVES, THIS IS HUGE NEWS. CHINA’S NEW MOVE ON YUAN TRADING SIGNALS THAT CHINA IS GROWING CONFIDENT THAT ITS CURRENCY IS STRONG ENOUGH TO HELP IT REBOUND WHEN THERE IS A DOLLAR COLLAPSE.

   THIS COULD SIGNAL THAT CHINA IS SECRETLY TELLING MARKET INVESTORS TO LOOK TO CHINA AND THE YUAN IN THE NEAR FUTURE ,BECAUSE THEIR MAY BE A STAMPEDE INTERNATIONAL MOVE AWAY FROM THE DOLLAR IF CHINA SEES MORE STABILITY IN ITS OWN MARKETS.(SEE HERE:System to promote yuan use globally ) 

China widens yuan’s trading band against U.S. dollar

SOURCE: XINHUA

The People’s Bank of China (PBOC), or the country’s central bank, announced Saturday it will widen the yuan’s daily trading limit against U.S. dollar currency to 1 percent beginning Monday.

In the foreign exchange spot market, Chinese banks can exchange the yuan 1 percent above or below the central parity against the U.S. dollar announced by the China Foreign Exchange Trading System each trading day.

Previously, the daily trading limit was set at 0.5 percent.

China’s current foreign exchange market is developing more maturely and trading entities are more capable of pricing independently and managing their risks, the PBOC said in a statement on its website.

Adjusting to the demand of market development, widening of the yuan’s trading band aims to promote the price discovery of the exchange of Renminbi, boost the yuan’s two-way fluctuation flexibility and improve the market-based managed floating exchange rate regime tied to a basket of foreign currencies, the PBOC said.

The central bank said in the statement that it will maintain the “normal fluctuation” of the yuan’s exchange rate, stabilize the rate at “reasonable and balanced levels”, and keep the macro economy and financial markets stable.

The yuan strengthened 5 basis points to 6.2879 against the U.S. dollar on Friday.

The central parity rate of the yuan against the U.S. dollar is based on a weighted average of prices before the opening of the market each business day.

Related:

RMB exchange rate approaching equilibrium: Premier Wen

BEIJING, March 14 (Xinhua) — The real effective exchange rate of Renminbi may have reached its equilibrious level after rising by 30 percent since China launched the exchange rate reform in 2005, Chinese Premier Wen Jiabao said Wednesday.

The exchange rate of yuan in the Hong Kong markets for non-deliverable forwards have started to float in both directions since last September, Wen told a press conference after the conclusion of the annual parliamentary session. Full story

China to steadily make yuan convertible on capital account

BEIJING, April 10 (Xinhua) — China’s foreign exchange regulator said Tuesday it will advance the yuan’s convertibility on the capital account in a stable and orderly way, although it is not the fundamental goal of the country’s foreign exchange reform.

It is a gradual process, and also a systematic project that needs the coordination of many departments to offset external impacts, the State Administration of Foreign Exchange (SAFE) said in a statement on its website. Full story

China yuan rises to 6.2879 against USD Friday

BEIJING, April 13 (Xinhua) — The Chinese currency Renminbi, or the yuan, strengthened 5 basis points to 6.2879 against the U.S. dollar on Friday, according to the China Foreign Exchange Trading System.

In China’s foreign exchange spot market, the yuan is allowed to rise or fall by 0.5 percent from the central parity rate each trading day. Full story

System to promote yuan use globally

BEIJING, April 12 (Xinhuanet) — A system to settle cross-border yuan payments and boost the convertibility of the currency will be set up, central bank officials said on Wednesday.

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