Chinese government will let the currency strengthen fast – that’s what specialists worldwide expect, since Friday, the Yuan passed the mark of 6.50 per dollar. It surpassed one psychologically important level. The expectations are now that the increase of the Yuan will beat the unreasonably high Chinese inflation.

Although 6.50 per dollar might not be significant from a technical point of view, that’s not what has been being announced by the Chinese economists and the media. From the Chinese standpoint, it is a sign of how far the government has come in allowing it just to observe the rising move since its landmark currency reform in 2005. Since then, the Yuan has gained 27.5%.

The less control over the currency by the Chinese government can also encourage other emerging-market currencies to rise further. It would help mainly the Asian countries, which are trying to handle with the high commodity prices.

Through its all day mid-point settings, the Central Bank of China created the momentum used by traders to rise, settling the currency high before closing it at 6.4910 in spot market trade on this Friday. The Yuan has now acquired
5.2% against the American currency.