Dollar still overvalued against Asia -study (at Reuters)

By Alister Bull WASHINGTON, July 23 (Reuters) - The dollar is still overvalued despite a prolonged slide against the euro and pound but the misalignment is now almost entirely with Asia, according to a study released on Wednesday. Economists at the Peterson Institute, using fundamental equilibrium exchange rates, found the Chinese yuan ought to rise by about another 30 percent while the yen should advance 20 percent against the U.S. currency. The yuan "is clearly fundamentally misaligned and seriously undervalued," said John Williamson, who coauthored the report with William Cline, both senior fellows at the Washington think-tank for international economics. China has already allowed its currency to rise around 18 percent against the dollar since loosening its grip on the exchange rate in 2005. But the country's... [read full story]