"Thanks for adding CHN.

"Eoin you have special knowledge of China - how do you reconcile the government's statements that it uses a basket of currencies to determine the Yuan's daily value with the fact that in practice it follows the USD VERY closely? For instance even in the last few weeks, when the dollar has shot up against other Asian currencies, there was scarcely a blip on the USDCNY chart.

"The CNH did though shoot up more than 1% today, which is huge for this market. I don't think it's ever traded at a discount to CNY before."

Eoin Treacy's view Thank you for this email which is sure to be of interest to other subscribers. The Renminbi is a managed currency and is therefore viewed as a policy tool by the administration rather than an independent vehicle. The currency has edged higher against the US Dollar over the last year. Against the Euro the pattern of appreciation has been less noticeable.

This overlay chart may help to distinguish the pace of appreciation against these two currencies. The Renminbi performed in line with the Dollar compared to the Euro from mid 2008 to July last year. It subsequently strengthened more against the Euro than the Dollar supporting the contention that the Renminbi has appreciated against a basket of currencies over the last year. Of course the US Dollar is still the largest component of that basket.

Today's weakness of the Offshore Renminbi spot rate was similar to that experienced by other Asian currencies and probably has more to do with a flight to a perceived safe haven than any meaningful change to the onshore peg.