Chinese Yuan Continues its Climb – Trade Balance says “YYAAAawwnn!”

The Chinese yuan hit yet another high – 7.8402 = $1…the parity rate set by the People’s Bank of China.

The value of the yuan has risen by 3.33% since July 2005. And Beijing and the US are expecting this change to make a difference in the $202 billion trade deficit set last year.

Fat chance….but time will tell.

Beijing allows a .3% fluctuation of the value of the yuan vs. the dollar. However, for the Japanese yen, Hong Kong dollar, eurp and British pound, values are allowed to fluctuate by ten times that = 3%.

Will a stronger yuan do anything to the trade imbalance?

What do you think?