The question of this exercise is to see if we can infer how the Chinese are moving their “adjustable” peg against the dollar. To do so we have to find a “numeraire” currency. Many economists recommend the Swiss Franc or the Australian Dollar, since the

The question of this exercise is to see if we can infer how the Chinese are moving their “adjustable” peg against the dollar. To do so we have to find a “numeraire” currency. Many economists recommend the Swiss Franc or the Australian Dollar, since the Chinese have stated that neither of these currencies are being used in their peg.