Tuesday, May 18, 2010

Marc Faber: China Won't Appreciate Currency Against U.S. Dollar

Marc Faber said at the Asian Investor Fifth Annual Asian Investment Summit in Hong Kong today that China is highly unlikely to remove the peg it has with the U.S. dollar, as the European sovereign debt crisis has knocked the euro down hard and fast.

Faber said, “If I had to take a bet, I’d say that the renminbi will not go up this year.”

The renminbi, or yuan, has appreciated against the euro by 16 percent so far in 2010, and exporters from China are starting to get nervous because of the rising costs of doing business as a result.

Faber also said he believes China should have eased up more than they did. Since July 2008, the renminbi has been pegged at an exchange rate of 6.83 percent against the US dollar.

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