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What The Widening Of The Trading Range Means For The Yuan.

|Includes: Market Vectors Chinese Renminbi/USD ETN (CNY)

This Barron's article seems logical to me. It says that the decline in the yuan is due to a reduction in the Chinese government's support for a premium to free market exchange rates. This acute event created outflows of currency which outpaced the inflows. The inflows should continue and I agree with the researchers that this outflow will settle down. This combination would return to an appreciation of the yuan. I rate CNY a "buy".

Disclosure: The author is long CNY, UUP.