Paving the Way For a Free Floating Yuan

"The yuan has risen 0.2% this week and has accumulated a 5.4% gain against the U.S. unit since June ..."
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The latest news also indicates that China's central bank will likely loosen control over its currency and may even double the rate at which it will allow the yuan to appreciate. 


Also it seems that the world's third largest miner, Rio Tinto of Brazil, is exploring the idea of settling its future accounts in yuan rather than dollars. 


The days of the US dollar as the world's reserve currency could be coming to a end sooner than most would have thought. Maybe having all your savings in US dollars or dollar denominated assets isn't the best idea?

Possible Pull Back For the Yuan, But Long Term Outlook Hasn't Changed

Presently 1 US Dollar is worth only about 6.48 Yuan
compared to about 8.28 in 2001. 

Since the Chinese yuan, commonly referred to as the renminbi (CNY), was depegged from the dollar around this time last year, it has gone up 5.38 percent in relative value. Presently, 1 US dollar is worth only about 6.48 yuan compared to about 8.28 in 2001. 


In fact, China’s real exchange rate with America has strengthened by almost 50% since 2005, according to calculations by The Economist.


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