Source:
The Globe and MailChina signalled it will allow its currency to appreciate against the U.S. dollar, bowing to international pressure days ahead of a visit from U.S. President Barack Obama.
The move to allow the yuan to rise against the greenback would provide much-needed relief to countries trying to compete against China's mighty export machine and put further downward pressure on an already battered U.S. dollar.
China's latest quarterly monetary policy report said its foreign exchangepolicy will now consider “capital flows and changes in major currencies,” indicating China will carefully expose the yuan's value to fluctuations in global markets.
... But others see more sinister motives in the Chinese move. By resuming a yuan peg to a basket of international currencies, the biggest winner is likely to be the euro, not the dollar, said Peter Morici, former chief economist at the U.S. International Trade Commission. “That makes it more difficult for the Americans to complain, and the Europeans less likely to help lobby the Chinese,” he said.
Read more:
http://www.theglobeandmail.com/report-on-business/china-sets-plan-to-let-currency-move-higher/article1359955/