China Exports Are Booming and Trade Surplus Is Widening—Why Is the Yuan So Weak? - Flaze News

Many factors are at work to push the yuan higher, but its climb has been sluggish...

China's August exports were up 9.5 euros from a year ago, while the import number was rejected. This points to a seven-question question in currency markets: With a broad trade surge, why is the Chinese yuan not growing more?

It is true that the currency at $6.83 is at its strongest level in a year, but it mostly reflects a weak green back, not a strong yuan. The ice dollar index, which tracks the value of the dollar against a basket of currencies, is more stely this year and is particularly against the yuan against the dollar this quarter.

China's 10-year government bonds yield exceeded their U.S. equivalent by 2.4 percentage points, a major difference since the global financial crisis, making the yuan-designated debt an attractive investment opportunity. Beijing's response to global warming talks to the relative difference: China's year-on-year growth in money supply lags behind the United States, Britain, the Eurozone and Japan.

The vast majority of Chinese tourists' ability to leave this country is also an advantage, because China is a pure importer of tourism services: its residents spend more abroad than visitors to China.

Although the official Chinese data is partially in the currency market, there is very little sign-in that suppresses the price of interference. The Foreign Currency Exchange Reserve data was slightly excel in July, but mostly the reserve. Alternative interventions have not indicated any major activity, although it cannot be fully ruled.