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Xi Jinping visited the United States this week on a trip that spanned Washington D.C., Iowa, and Los Angeles. Among other things, the anticipated president of China in the March of 2013, inked a mega 4.35 Billion dollar soy bean and apparently told LA Mayor Antonio Villaraigosa that he is a big fan of Kobe Bryant.
Image by kalleboo via Flickr
The Yuan climbed against the dollar today, inching to its all time high of 6.31/$ despite short sentiment stemming from concerns that China‘s economic growth is slowing next year (see morgan stanley note on their Global Economic Forum). In contrast to the rally, 12-Month Non-Deliverable Forwards, low volume short term cash settled contract determined by the difference in a previously agreed upon price of foreign currency and the current spot price, fell this week indicating that the Yuan will be trading at 6.37/$ by the end of next year.
The Yuan has gained a total of 4.27% this year.
Regardless of what you think about next year’s global economic outlook, it does seem like over the long term that the Yuan can only increase in value relative to the dollar, which is why it will be interesting to see what Hong Kong does in regards to its long standing USD peg.
