Chinese Yuan Reaches Milestone

The Chinese Yuan has crossed the psychological barrier of 7.5 RMB/USD, a level last seen nearly a decade ago.  The currency’s appreciation has been gradual but visible, not withstanding the cries of western bureaucrats.  By all accounts, the Yuan will continue rising, though not at the same pace as its trade surplus, which is projected to jump from $177 Billion in 2006 to $300 Billion in 2007.  Predictions regarding the
extent of the appreciation range from 20% to 400%, the implication being that it depends who you ask. But the general consensus is clear: the Yuan is pointing upwards.  Bloomberg News reports:

Non-deliverable forward contracts show traders are betting the yuan will reach 7.0070 in 12 months, a gain of 6.9 percent from the spot rate, and 6.95 by the end of 2008.

Read More: Yuan Gains Past 7.5 for First Time in Decade as Surplus Widens