Currency News: Yuan Stabilizes For Third Straight Day

Currency News

The yuan stabilized by coming in at 6.5628 per US dollar  on Tuesday, marking the third straight day that the Chinese currency didn’t depreciate.  This news gave the world and particularly Asian stock a huge sigh of relief.

currency news

“The currency devaluation is meant to spur Chinese growth, but if the devaluation shocks European and U.S. markets to the point that it triggers extreme risk aversion and possibly recessions there — then it is counterproductive,” Peter Tchir, head of macro strategy at Brean Capital, wrote in a note Sunday.

Traders and analysts say they remain on edge, as Chinese authorities contend with the prospect of increasing capital outflows from the world’s second largest economy. There is a concern that the Yuan’s recent drop is being caused by the market and a flow of money being yanked out of the Chinese economy.

Last Week Chinese it was revealed that Chinese reserves fell $108 billion dollars in December. This is usually a sign that the central bank is actually spending a lot of money to prop up the yuan in order for it not to collapse under a wave of outflows.

This makes the yuan a bit of mystery as to what’s controlling, and if it’s done falling.

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