"I am working in China and agreeing my rate of pay now. I have a choice of agreeing this in £stg, CHY or Euro (it will be paid into a euro account). I often hear you mention the CHY is undervalued so maybe I should take that currency since it should rise in value?

David Fuller's view Thank you for your kind words.

There are plenty of swings and roundabouts in currencies, as you know. However, if we ask, which of these three currencies (I assume you mean CNY) is backed by the country or region most likely to experience above average GDP growth, and will therefore have less reason to debase its currency over the medium to longer term, I would agree with your inclination.

I suggest that price charts also support this view. This weekly chart of CNY/GBP (Bloomberg's prices contain an obvious data spike error in Dec 2009) has been largely rangebound since the surge in 2008 but the lows are mostly rising, indicating that there is still a preference for CNY. The overall price action for CNY/EUR is stronger, albeit volatile, within the ranging uptrend.

I imagine that working in China will be a fascinating experience. If you ever have an opportunity to share some of your impressions and conclusions, I am certain that they would be welcomed by the Collective.