Yuan Rises Against Dollar Amidst Speculation of U.S. Rate Cut

Today the value of China’s money that called the yuan went up a bit compared to the U.S. dollar. This happened because people think the U.S. government might lower interest rates which could make the dollar weaker. People are also waiting to see what the European Central Bank will do about interest rates.

Before the markets opened China’s central bank decided the middle rate for the yuan which affects how much it can be traded for. They set it at 7.1108 yuan for one U.S. dollar that is a bit weaker than before.

During trading one yuan could be exchanged for about 7.2447 U.S. dollars. This is a little stronger than before.

People are thinking the U.S. might lower interest rates because recent data suggests the job market there is not as strong as before. They are also keeping an eye on a report about U.S. job numbers that’s coming out soon.

Experts believe the U.S. dollar might drop a bit if the job report is good. Also the European Central Bank is likely to lower interest rates too.

A recent survey showed that China’s service industry is growing faster than before which is a good sign for the country’s economy. However there are concerns about tensions between China, the U.S. and the European Union which could affect the value of China’s money.

Overall the global value of the U.S. dollar went down a little bit today.

The status of the yuan market as of 4:05 AM GMT:

ONSHORE SPOT:

Spot change YTD: -2.03%

Spot change since 2005 revaluation: 14.24%

*Divergence of the dollar/yuan exchange rate. A negative number indicates that the spot yuan is trading stronger than the midpoint. The People’s Bank of China (PBOC) allows the exchange rate to rise or fall 2% from the official midpoint rate it sets each morning.

OFFSHORE CNH MARKET: