China Unbinds the Yuan

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    The Chinese government’s decision to break the tie between its currency, the yuan, and the US dollar and to value it against an index of currencies is generating buckets of ink.

    Here are some of the more interesting perspectives on what’s to come with this new managed float:

    The Wall Street Journal provides answers to common questions:

    http://online.wsj.com/public/article/0,,SB112195668788292150-8vmYRbGuWrN4GfJV_KOgusymuMw_20060722,00.html?mod=tff_main_tff_top

    The Financial Express, an Indian publication, shared this Reuters article on the impact of the Indian rupee (hint: It initially climbed against the dollar, until the brakes were put on.):

    http://www.financialexpress.com/latest_full_story.php?content_id=97149

    This analysis in the London Times questions what impact the unpegging will have on the American manufacturing industry.

    http://business.timesonline.co.uk/article/0,,8210-1703511,00.html

    Alan Greenspan spoke to Congress on the subject and rejected the idea that somehow the yuan revaluation “would be a panacea for US industries struggling to fend off fierce competition from lower-cost rivals,” in this AFP article:

    http://fullcoverage.yahoo.com/s/afp/20050623/bs_afp/uschinatradeforex/nc:1203

    The Standard, a business paper in China, predicts little impact on Chinese businesses:

    http://www.thestandard.com.hk/stdn/std/Business/GG23Ae01.html

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