China details currency basket components

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CHICAGO (MarketWatch) - China on Wednesday provided additional details on the currency basket it has adopted to replace the rigid decade-old dollar peg.

The primary currencies in the basket will be the U.S. dollar, euro, Japanese yen and Korean won, according to a statement on the People's Bank of China Web site.

But also featured are the currencies of some of China's other trading partners, Singapore, the U.K., Malaysia, Russia, Australia, Thailand, and Canada.

Central bank governor Zhou Xiaochuan made the following remarks:

"Current account is a major component of China's balance of payments, whereas trade in goods and services is the predominant item of current account. The current situation in China shows that trade in goods and services dominates current account balance. Therefore, the shares of trade are the major considerations in the determination of the currency

MarketWatch

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1. fear of a yuan/euro reserve currency system...

Bushler's going to start more wars.

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2. Well, it's the end of the peg.

I expect China still wants to sell us lots of plastic stuff,
so efforts will be made to keep changes modest and orderly,
but this is not good for dollar exchange rates.