The euro struggled to hold above eight-month lows against the dollar on Friday, hurt by a dive in Germany's Ifo survey of business sentiment.» Read More
A stronger yuan can help temper price pressures but plays second fiddle to monetary policy in China's struggle against inflation, the country's central bank chief said on Thursday.
Plans for sweeping federal programs that would aid troubled mortgage borrowers would bring unfair relief to speculators and reward investors who made bad bets, U.S. Treasury Secretary Henry Paulson said Thursday.
China's economy is likely to grow around 10 percent this year despite a global slowdown stemming from the U.S. subprime mortgage crisis, Dominique Strauss-Kahn, managing director of the International Monetary Fund, said on Friday.
China needs a more flexible currency to ward off rising inflation risks and the danger that its economy might boil over, U.S. Treasury Secretary Henry Paulson said on Wednesday.
China and the United States downplayed points of contention in trade relations, saying both sides needed to fend off protectionism as they prepared for difficult negotiations on economic disputes ranging from exchange rates to product safety.
China could be moving in the direction advocated by Europe of a stronger yuan, European officials said. The ECB and the People's Bank of China would set up a working group at once to examine currency issues.
The euro's rise against the yuan is largely a reflection of a sharp drop in the dollar, and the European Union should look to Washington to resolve the problem, Chinese Premier Wen Jiabao said on Wednesday.
China and the 13 countries using the single European currency agreed on Tuesday to cooperate to reduce global economic imbalances while heading off lurches in exchange rates.
French President Nicolas Sarkozy called publicly on Chinese President Hu Jintao to let the yuan rise more swiftly against the euro.
China's central bank chief said on Sunday it could consider a wider trading band for the yuan currency after finance chiefs from the Group of 20 economic powers renewed calls for greater currency flexibility.
U.S. Treasury Secretary Henry Paulson said on Thursday that China should pick up speed in making the reforms necessary to allow the yuan to float, warning China about rising trade protectionist sentiment.
Irked by the relentless ascent of their currency, euro zone finance ministers have decided to target China's yuan as the chief culprit in a quest for fair play on global exchange rates and trade.
Beijing will cap a program allowing its citizens to invest in Hong Kong's stock market, regulators said on Friday, scaling back an earlier aggressive plan to open a gateway for its capital accounts.
A more flexible yuan would not hold back China's growth or cause deflation but would help Beijing rebalance its economy towards domestic consumption, a top U.S. Treasury official said on Thursday.
The Chinese yuan rose sharply against the U.S. dollar on Monday after the Chinese central bank set a higher reference rate for the Chinese currency following Friday's poor U.S. jobs data.
U.S. President George W. Bush said on Wednesday it would help to balance trade if China floated its currency, which has been allowed to appreciate gradually in the past two years but remains tightly managed.
The dollar slipped against the yen Friday after President Bush and the head of the Federal Reserve both said they would not rescue speculators ailing from deteriorating lending conditions that could worsen.
The yen rose modestly Thursday, recovering from the previous day's sharp decline, as investors continued a longer-term trend of reducing risky bets in response to troubled credit markets.
The yen gained on Tuesday as investors, fearing tougher credit conditions will crimp global economic growth, bought the lower-yielding Japanese currency and sold riskier assets.
The dollar rose against the euro, but fell against the yen Monday, as investors attempted to minimize exposure to risky assets amid lingering fears of a global credit crisis.