For hedge funds, is China ultimately going to go the “yuan” way?
| Oct 27th, 2010 | Filed under: Institutional Investing, Today's Post | By: AAA Staff |
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If there is one area that has more recently garnered a significant amount of attention, it is the currency markets, specifically the Chinese RMB versus the US dollar and other first-world currencies.
The latest focus has been China’s surprise decision earlier this month to raise interest rates for the first time since 2007 – a modest upward move but one that has nonetheless unleashed a new wave of speculation about where China is going with its currency.
The issue wasn’t the interest rate increase itself – a modest hike by any stretch and not one that will make or break the Chinese economy. More to the point was symbolism behind the move: it appears that the Chinese government thinks its economy is growing too quickly and short of letting its currency appreciate decided to send the world a message by raising interest rates.
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