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China Likes Strong Yuan

Forex buy news for Wednesday was marked today by strain between the U.S. and China as the dollar closed in on an eight-month low against the yen on Monday on signs China is becoming more supportive of a rise in the yuan while the United States may be comfortable with a weaker dollar. The U.S. currency also sank to a one-year low against the euro as the Federal Reserve appears set to end a two-year run of raising overnight short-term interest rates.

Forex buy analysts have been expecting China to allow a rise through the 8.00 level as a symbolic gesture after the U.S. Treasury stopped short of calling Beijing a currency manipulator last week.The dollar was also bruised by a weekend report in the Wall Street Journal that the administration of U.S. President George W. Bush is "quietly acquiescing" to a weaker dollar to help reduce the U.S. trade deficit.

The dollar was also bruised by a weekend report in the Wall Street Journal that the administration of U.S. President George W. Bush is "quietly acquiescing" to a weaker dollar to help reduce the U.S. trade deficit. "The report has opened the door to more dollar selling as China looks to forex buy advantages for a strong yuan and weaker-than-usual dollar," said on forex buy manager at a trust and banking firm in Asia.