Thursday, December 14, 2006

China, making all the right moves

China's currency the Yuan, has risen to a new high against the U.S. dollar today. This as U.S. Treasury Secretary Henry Paulson continued to encourage the nation to relax currency controls and clamp down on piracy to help close the trade gap. For years the Yuan had been a fixed currency against the dollar and as such gave the country an unfair advantage with trade. This because the Yuan was considered undervaled and as such made Chinese made goods less expensive on the open market. Congress has been after the President to impose tariff's to equal the playing field. So far the President has held off on doing this (along with congress agreeing to the wait and see approach)and been using behind the scenes effords to pressure China to let the Yuan strengthen. Currenctly it seems to be working, based on the last few months of the Yuan's movements. Now lets see if this will actually help (in a meaningfull way)the manufacturers here in the States.



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