We see that the Chinese economy faces higher inflation during the period, and the government is seeking to find new stimulus to cool inflation rates in the New Year, where the expectations indicated that monetary policy in China will allow the nation's currency to strengthen to support economy to fight inflation rates.

Yuan will advance 6.00% versus its major counterpart the greenback this year, as the government planned to reduce imports' costs, after the economy recognizes the usefulness of letting Yuan to appreciate against the dollar to help to achieve its plan in 2011.

On the other hand, the PBOC has raised the overnight cash target rate twice to 5.81% in the fourth quarter of 2010, because of the Bank sees this decision will be a good and greater tightening effect than it would have in January, while the governor of the bank has expected that the bank would increase the rates during the first six month of 2011.

Moreover, Chinese currency against the U.S. dollar pair traded at the 6.5855 level, little changed from 6.5833 during the last trading session of last week, and the pair traded at 6.5812 on Jan. 21 which is the highest level since 1993.