China Slows Yuan's Rise Amid Exporter Support

China is taking steps to slow down the rise of its currency, the yuan. The move could cause friction with trading partners who think the yuan is still too weak.

The yuan has gained nearly 9% against the US dollar over the past 20 months, reaching a 3-1/2 year high. Market participants say that authorities are intervening to support exporters by keeping the currency's gains in check.

According to Peter Berezin, chief global strategist at BCA Research, 'I can't see China allowing the RMB to strengthen really significantly against the U.S. dollar.' He points out that lending and spending indicators are trending lower, which is inconsistent with a stronger currency.