CCY Effects on China Central Bank Rate Move

As we all know by now that the financial markets since the past few years has been dominated by central bank policy makers. Reading, analyzing and interpreting language and intentions for clues of direction can be taxing, confusing to a certain point of uncertainty.

Today's move by China central bank in increasing their central rates by a 0.54% points have given another surprising blow to currency traders. Although, our take on this move have apparently been more subdued to the fact that China's central bank would really have some difficulty to relinquishing control and hold of this powerful tool to take control of their economy. Aside from the fact that it would a great pride for China whenever the IMF would recognize the Chinese Renminbi (Yuan) to be part of the basket as a global reserve currency.

 USD vs.Chinese Yuan as of Nov 02 Asia Trading Session

This move is currently the biggest gain since the previous devaluation which was interpreted as as way for China to stay afloat and be more fairly competitive in the global markets. The present move would have a positive effect; not only for China's economy which has been claimed to be reaching stability along side with the global markets. Click to continue