Tuesday, October 19, 2010

China Raises Interest Rates

First increase since December 2007. As this will reduce demand, this has caused stock- and commodity prices to drop today. It also in effect helped cause the yuan to appreciate against most currencies as it was unchanged against the U.S. dollar while the U.S. dollar rose.

This move could be seen as a hint hint that the growth and inflation numbers from China released later this week will be stronger than previously expected.