Devaluation of the Yuan to the Dollar

Devaluation of the Yuan to the Dollar

As anyone who follows the subject of outsourcing or “low cost region sourcing” knows, two significant events occurred last week. China reported a second quarter economic expansion of 9.5% of GDP and China revalued the Yuan approximately 2% from 8.28 Yuan/ US$ to 8.11 Yuan/ US$. Probably of more significance than the modest revaluation, was the move to a more “floating” exchange rate based upon a basket of currencies.

According to the articles that I have read regarding these two events, the impact on the North American economy will be modest. It was generally agreed, however, that short of a majority economic upheaval, this revaluation is the first of many to come.