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Chinese currency relative to the us dollar

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Reference no: EM133065912

Historically, the Chinese government would fix the U.S. - China exchange rate for years at a time, but for simplicity, let's treat it as a market rate that can change every day. Suppose a valid and credible news story came out titled: "Chinese Factory Sells Poisonous Dog Food." Assuming that Americans are big consumers of dog food produced in China, would this news story likely raise or lower the price of the yuan (measured in terms of dollars per yuan)? Does this strengthen or weaken the Chinese currency relative to the U.S. dollar?

Reference no: EM133065912

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