Chinese central bank is trying to keep yuan on the surface, while the news about Fed interest rates hike is hurting other currencies badly. The average point of yuan, set by its national bank is currently equal to 6.9289 against one dollar. And we can assure you that it is the weakest number in eight years.
Meanwhile, against the other currencies yuan is getting even stronger. It rose enough for the successful trading.
And now, when yuan fell towards the dollar to its lowest since 2008, the situation became dangerous for Chinese traders and its economy.
Chinese currency is not the only one that felt the real pressure from Fed’s decision. Under the fire came South Korean currency won, and dollar from Singapore, which both belong to the low-yielding rank.
Analysts predict even more negative changes to low-yielders if the American dollar will continue to rise higher, and yuan will continue to fall down.
This situation concerned South Korean central bank so much, that they made it the main topic of today’s meeting.
Their main policy was to keep national rates in its lowest position of 1.25 percent. Still, the South Korean economy is based on the export income, and many analysts believe that to stay alive on the market they have to cut rates even more. So right now they are dealing with the new problem, as easing can spark the destabilization in the capital flows at the time of higher yielding assets from the USA.