Chinese yuan is higher against the US dollar, gaining to its greatest value in almost 19 years. With so much weakness around the globe, pressure is high enough that China had little choice but to let the yuan appreciate.
China announced, in a surprise decision, that it is cutting its interest rate. The announcement helped maintain risk appetite from yesterday, and provided a boost for the Australian dollar. Aussie is seeing gains today as a result of the Chinese policy decision.
Earlier, US dollar was higher against its major counterparts, gaining as Forex traders looked for safe haven as growth worries persisted. Now, though, the greenback is heading a little bit lower as a bit of optimism peeks through.
It has been predicted that by the year 2020 half of all luxury vehicles will be sold in China. Currently BMW only sells more vehicles in Germany than it does in China. Cadillac only sells more vehicles in the US than it does in China.
For years, other countries have been asking China to let the yuan, also called then renminbi, to float more freely on the currency market. It appears that China is doing that now, with an announcement that the yuan will be allowed to float more freely against the US dollar.
Forget cheap imports. China's rise will soon be a force on Wall Street and Main Street and in Silicon Valley.
