Earlier this month, the People’s Bank of China announced that it would double the allowable trading range for the yuan against the dollar to 2 percent from a midpoint rate it sets every day. This move provides evidence that the government is moving toward a more market-driven economy.
I’ve noted that there’s a direct correlation between announcements that China continues to send signals that it’s revamping its financial sector, loosening its grip on the its currency, the yuan, and calls/emails I get from investors worried about what will happen if the dollar loses its status as the world’s reserve currency.
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