08.07.2014 - U.S. to fire early warning shot at China over currency
The U.S. Treasury is expected to put pressure on China over recent weakness in its currency during high-level meetings in Beijing this week. Before leaving for the Beijing talks, Treasury Secretary Jacob Lew expressed concern over China’s foreign-exchange intervention. Lew said China seemed to follow a path of “two steps forward and part of a step back” on the exchange rate. Although the yuan has appreciated by 14% since 2010, it “still needs to appreciate more, it is undervalued,” Lew said. Nicholas Borst, an economist with the Peterson Institute for International Economics, said that the U.S. wants to send “an early warning shot” at China in order to put a floor under depreciation. While some of the weakness of the yuan appears to be market driven, some is “policy-driven,” Borst added............................................Full Article: Source