I have to disagree with Org on this one as well as on both hypothisis mentioned in the post , as i previously stated i believe the yuan will increase significantly before the end of 2010 , i think China will let the yuan appreciate in a control environment starting after the FED starts demoneytising and once they can figure where the US dollar and US economy is heading .

Sometime between the end of 2010 Q1 and the end of Q2 i think they will engage in this process and accelarate as the year progress as to avoid infringing on world economy's improvement and provoke increase protectionism , wich they would be the worst victim of .

In doing so i think they will at same time improve the outlook of the US dollar and give a second boost to domestic demand in China while reducing growing international pressure on their exports . While monitoring the rise of the yuan against other major currencies they will also gain power in the international arena and in widening further the use of it's currency in international trade progessively (as they have already done to a lesser degree in Asia and with other Brick countries) they will reduce the strain on their hard currencies reserve wich along with gold is their "war treasure" .

I believe those are reasons enough for the yuan to rise significantly in value over the second half of 2010 .

I said in a earlier post that it could rise up to 20% above it's present value and it might be too optimistic but that's the ball park figure i have in mind for somewhere around the end of 2010.

Regards !

Tec