Chinese Yuan Hits 18 Year High Against Dollar

by Tyler Durden
04/29/2011 04:40 -0400
36 comments

The world's most anticipated currency revaluation continues at its traditional glacial pace. And while it is not a surprise to anyone, the overnight PBOC fixing for the CNY dropped below the psychological 6.50 level (or 6.4990 to be precise) for the first time since 1993. Granted, if the US and Chuck Schumer in particular were to stop pushing China to revalue, it would have long since done so at a faster pace, however in light of the diplomatic effort to force it to do so, the ongoing snail's pace shift in FX will continue (and may well reverse now that even more legislation is introduced to the "enforce" China's currency manipulator status). Yet what is notable is that over the past 4 days the CNY has seen a dramatic 0.75% appreciation: easily one of the most aggressive weekly moves by PBoC bands. Is this move merely a political ploy to silence the critics, or is China truly starting to crack under the weight of its own inflation? We shall know soon enough.

More from Bloomberg:

The currency’s seventh weekly gain, its longest winning streak since July 2008, may damp U.S. criticism of China’s exchange-rate policy before Premier Wang Qishan heads to Washington next month for talks with Treasury Secretary Tim Geithner. Consumer prices in Asia’s biggest economy rose 5.4 percent from a year earlier in March, exceeding the government’s 4 percent goal for this year.

“Inflation is still higher than what the government would like to see,â€