Interest in China’s Exchange Rate

You know that people are a bit on edge regarding China’s exchange rate policy when this story is one of the top news items (at least as of 1pm EDT) on the Financial Times:

China says no change in monetary policy

China’s renminbi currency traded briefly outside its tightly controlled band on Friday, triggering a renewed wave of speculation that the government was set to allow a long-expected revaluation.

…Traders said the renminbi, which has been pegged to the US dollar for a decade, was briefly in the market at a rate of Rmb 8.2700 to the dollar, outside of the usual band of 8.2760 to 8.2800.

For a temporary 0.07% deviation in the Renmimbi exchange rate to make headlines suggests that a lot of people not directly involved in currency trading are very, very interested in what happens in that particular market…