Saturday, March 29, 2008

Yuan Exchagne Rate: Appreciation or Depreciation?

(click to enlarge, author's own calculation)

Europe is China's No. 1 trading partner. It seems that they did not get the deal the US is getting. Are we going to see more appreciation pressure of CNY/Euro in the future? Or Europe, a union of rough a dozen countries, is fundamentally weaker than the U.S. when it comes to negotiation power?