Australian dollar and Chinese Yuan

The Australian dollar rounded out a winning month, buoyed by speculation China will allow its currency to rise. China has established the conditions to adopt a more flexible exchange rate, the China Securities Journal reported yesterday. China is Australia's third-biggest export market with overseas sales of raw materials to the country tripling in the past six years.

Australian currency strengthened to 78.13 U.S. cents late in New York yesterday from 77.29 cents at the end of March. China buys and sells dollars and &to=http:// ' target=_blank>yuan to keep its currency at about 8.3 to the dollar. It allows the currency to trade as much as 0.3 percent above and below that rate.

Critics say the yuan became undervalued as the dollar declined in recent years, giving Chinese manufacturers a price advantage, publishes Bloomberg.

Speculation &to=http:// ' target=_blank>Osama bin Laden had died helped steady European shares after the Nasdaq hit a six-month low, but record-low bond yields bore witness to still-fragile investor confidence.

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