Forex Trading

Individuals cannot trade the yuan on the forex market. However, what happens with the Chinese yuan can influence other currencies. This is happening today as the world digests the news that the Chinese have allowed the yuan (also sometimes called the renminbi) to appreciate against the U.S. dollar.

The news is sparking some optimism that global trade will be enhanced by the news. Chinese officials like to keep the yuan low relative to other currencies (especially the U.S. dollar) as a way to maintain the upper hand in the import/export game. With China pledging more yuan flexibility, and backing it up with yuan appreciation, many investors are feeling optimistic.

As a result, the U.S. dollar is lower today, down against risk currencies as investors become bolder. The U.S. stock market has opened significantly higher, with the Dow more 100 points up minutes into trading. With investors looking for better returns, and the yuan decision adding to optimism, it is little surprise that the U.S. dollar is being sold in favor of other currencies.

See Also

• Yuan Influence on the Currency Market
  Forex trading on the currency market