Commentary
The Chinese yuan (a.k.a. renminbi) is on pace to drop the most against the U.S. dollar in history as the world’s two biggest economies carve divergent paths in monetary policy. On Sept. 15, it broke the psychologically important 7 yuan to 1 U.S. dollar barrier.
The U.S. Federal Reserve is poised to continue its tightening measures to combat inflation. That itself has given a boost to the dollar compared to the euro (dragged down by a struggling EU economy and impending energy war with Russia) and the yuan.
With respect to the yuan, which has dropped almost 9 percent year-to-date against the dollar, the currency is on course to post its weakest annual showing against the dollar since China loosened the yuan’s dollar peg back in 2005….