China moving close to revaluing yuan

Asian currencies gained amid growing conjecture that China was close to revising its currency policy, including letting the yuan float a little more freely against the US Dollar. The timing of the move and the details of new regime remain unknown. Billionaire investor George Soros said that China and the US have probably come to an agreement on the yuan amid speculation that the currency’s 21-month-old peg to the dollar may be scrapped. Treasury Secretary Timothy Geithner made a surprising trip to Beijing and had a meeting with China's Vice Premier Wang Qishan amid wide speculation that the yuan may be revalued shortly. He was scheduled to return to Washington directly after visiting India.

Last week, the Obama administration postponed the publication of a report on international exchange-rate policies that was expected officially to declare that China manipulates its currency. Some economists estimate that the yuan is undervalued by as much as 40%, benefiting Chinese exporters but hurting others. Many economists, US lawmakers, business executives and union leaders say an artificially weak yuan has cost millions of jobs in the US. Allowing the yuan to slowly appreciate against the dollar would make Chinese-made goods more expensive and U.S.-made goods relatively cheaper.