China's Currency Is Weakening. It's Too Easy to Misread Why.

Text size About the author: Marc Chandler is chief market strategist for Bannockburn Global Forex, a division of First Financial Bank. The dollar's strength this year has bulldozed many currencies. But the exchange rate against the greenback may overstate the weakness of foreign currencies on a trade-weighted basis, including the Chinese yuan. It has fallen by around 12% against the dollar this year but is off less than 2% against a trade-weighted basket of currencies. China is increasingly viewed as the other—a result of, and fodder for, strategic competition with the U.S. Many are suspicious that the decline of the…