Global Reflation Trade Gains New Momentum From China’s Yuan
Bloomberg 1 hr ago
China’s yuan is overvalued, and that could end up stoking global inflation.
The yuan ranks as the most overvalued among 32 major currencies in real effective exchange rate terms, an analysis of JPMorgan Chase & Co. indexes show. As Chinese exports are ubiquitous across a range of goods, the strength could translate into quicker inflation globally, adding to investor expectations for tighter central bank policies.
The potential impact from the Chinese currency’s inflation-adjusted strength is a reflection of the nation’s quicker economic recovery from the pandemic, and its importance as the factory of the world. Since July, the yuan has advanced more than 5% against a basket of major trading partners, which includes the euro and the yen.
Global Reflation Trade Gains New Momentum From China s Yuan
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