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China currency drop: Any impact on U.S. economy?


Friday, August 21, 2015

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Kelly Cunningham, National University System
Answer: NO

China’s devaluation of exchange-rate with the U.S. dollar is not big enough to set off competitive devaluations or currency manipulations against other exporters. The depreciation is a small, belated step keeping the yuan’s value in line with other market value currencies. The yuan remains stronger than it was a year ago in trade-weighted terms. The more significant impact comes from decoupling the yuan to the dollar that signals China will no longer continue subsidizing U.S. spending.