Ask Terry Questions China currency value

China currency value

By Terry Savage on September 27, 2015 | Wild Card

Didn’t the euro change value on the Forex . . . . While china stays safe with it’s pegged value?

Terry Says: 

The Euro is traded all day every day – and its value fluctuates against the dollar depending on many issues (Greece, inflation/deflation, the refugee problem, growth throughout the Eurozone, etc.)  Trading is done between banks around the world — and on futures exchanges.

You’re right. The Chinese for nearly a decade linked (pegged) their currency to a fixed value against the dollar. But with the dollar’s strength around the world, it started making the Chinese currency “too expensive” – and it was tough for them to sell their exports. That’s why they let it float – or rather “sink” against the dollar.

But the point of my column is that it hasn’t sunk by too much, and in fact the Chinese government has been supporting its value in recent days. The Chinese currency is down about 6 percent. The Canadian dollar is down more than 20 percent in the same time period – and we aren’t yelling at them!




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