What happens if the Chinese money (CNY) appreciates against the Euro?

Assignment 1
a) From Figure 1 and 2 we can see that the CNY has appreciated against the Euro. From Figure 1 we see that in January 2006 the cost of 1CNY was about 9.5Euros and in May of 2008 the cost of 1CNY is now 11Euro. Therefore the CNY has become more expensive against the Euro.
Figure 2 explains the same thing, but here in terms of the Euro –We see clearly that the Euro has depreciated against the CNY and that 1Euro went from costing 0.106CNY and now it costs only 0.091CNY in 2008. This means that it has become more expensive to buy the CNY currency and the Euro has depreciated against it.
b) The main reason that the CNY has appreciated so much against the Euro is that the factors which the exchange rate is based on has developed better in China in the last 2 years than they have in Europe. These factors are for example Economic Growth. Production in China is very high and the wages and cost of......

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Title: Cny Appreciation
Approximate Word Count: 1369
Approximate Pages: 6 (250 words per double-spaced page)

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