Yuan Weakens against Dollar

China's currency, the yuan, fell by the daily limit against the U.S. dollar for a second day on Tuesday, its fourth straight daily decline.

The yuan finished at 6.8870 per U.S. dollar on the over-the-counter market, having declined 0.5 percent against its central parity rate.

The central parity rate, announced by the China Foreign Exchange Trading System, was 6.8527 yuan per U.S. dollar on Tuesday, compared with 6.8505 yuan on Monday.

On Monday, the yuan also fell by the 0.5 percent daily limit on the over-the-counter market to end at 6.8848 to the U.S. dollar. Monday's move marked the yuan's biggest weakening since China ended the peg to the U.S. dollar in July 2005.

The yuan's central parity rate is based on a weighted average of market makers' price inquiries before the market opens on each business day. The rate is allowed to fluctuate within a band of 0.5 percent on either side of the mid-point.

China, U.S. Starts SED amid Financial Crisis

China and the United States started strategic economic dialogue in Beijing on Thursday morning, December 4, 2008. [Photo: Xinhuanet]

China and the United States started their fifth strategic economic dialogue (SED) in Beijing Thursday amid the deepening global financial crisis and transition in the U.S. government.

Chinese Vice Premier Wang Qishan and the U.S. Treasury Secretary Henry Paulson co-chaired the opening dialogue on Thursday morning as special representatives of President Hu Jintao and President George W. Bush.

"The most pressing issue we have to deal with is coping with global financial turmoil," Wang said before going behind closed doors.

"It is imperative for us to work together to implement the consensus reached at the G20 summit," Wang said, referring to a financial meeting of leaders from the 20 richest countries and emerging economic markets in Washington D.C. in mid November.

For the first time during the SED, Paulson said the United States and China will focus on how they work together through international forums to strengthen the global economic system.

As the global crisis looms large, Wang said the priority was to restore investor confidence as soon as possible, restrain the crisis from spreading, and avoid a global economic recession, with special regard for the impact that it will have on developing countries.

EU's Eurostat Confirms Recession in Eurozone

First estimates from the European Union's statistics office Eurostat on Thursday confirmed that the eurozone's economy had entered recession as it contracted again in the third quarter.

Eurostat said that economy in the 15-nation euro area contracted 0.2 percent in the third quarter, after another 0.2 percent shrink in the previous quarter. Two quarters of contraction means technical recession.

Compared with the third quarter of 2007, seasonally adjusted GDP rose by 0.6 percent in the euro area.

In the 27-nation EU, growth also shrank 0.2 percent in the third quarter over the previous three months, when the GDP growth remained unchanged.