Nothing to Yuan about

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China’s Yuan gained today to its highest level (6.3515) since its devaluation August 10.  The difference between domestic and offshore Yuan trading has evened after widening as much as 2% during the devaluation, while Wednesday’s foreign reserve showed a much smaller decline (-$43 billion to $3.51 trillion) in September, suggesting diminishing capital outflows.  Now only -2.2% against the dollar since that fateful August day, investors forecast stabilization as the central bank plans to issue its first yuan-denominated bonds in London in an effort to broaden the international use of its currency.  Among the Yuan’s supporters, Treasury Secretary Jack Lew said Tuesday that they US would support the inclusion of the Yuan into the IMF’s basket of global reserve currencies.

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