From Financial TImes:
The European Union and China locked horns over exchange rates on Tuesday after authorities in Beijing deflected a European call for a rise in the level of the renminbi.
Only hours after eurozone finance ministers said the renminbi’s exchange rate should more accurately reflect the country’s vast and growing current account surplus, China’s central bank set a noticeably low official reference rate for the currency against the dollar. Market participants interpreted the action as a signal that China has no intention to yield to foreign pressure for a faster appreciation of the renminbi against the currencies of its western trade partners, although there was no firm evidence of this. [Full Text]