The Chinese Yuan has been artificially kept in a range despite the growth differential between China and the United States. This macro state of affairs is unsustainable and Chinese monetary policy officials will be forced to correct it since the recent rise in energy prices may spark an unstoppable wave of inflation. Look for a sudden drop in USDCNY to at least 6.4 and for a possible appreciation of Asian currencies against the dollar.
GDP Growth Across the World (click on the map for historical data)
Antonio Sousa is a Chief Strategist for DailyFX.com at FXCM in New York City where he performs global economics research and develops systematic trading strategies. Please send your comments to email@example.com.