Wednesday, November 23, 2016

Dollar in Three Year Rally Versus the Yaun

F. Hale Stewart is a financial adviser with Thompson Creek Wealth and a transactional attorney, specialising in asset protection and advanced tax planning. 

The chart above shows that the dollar rallied about 10% versus the yuan over the last 3 years.  There are two reasons for this move.  First, as U.S. economic activity started to increase, so did the possibility of the Federal Reserve increasing interest rates -- an event that is dollar positive.  Second, over the same period, the Chinese economy started to weaken (relatively speaking) which places downward pressure on the yuan.