A comparative analysis of the currency relationship between China and US

In recent year, the continued rise in RMB has been attention by many economists, as well as the position of the U.S. dollar is said to be at a crossroads. Many U.S. policy makers have argued that the Chinese currency is undervalued at its current exchange rate around 6.23 yuan to dollar. In this paper, compare the central currency of the USD and the RMB currency of the fastest developing country, China, through the Big Mac index to proof of the RMB being undervalued, the low value of the RMB has been cause more and more people complaints from the U.S. manufacturing firms and workers. Thus, evaluate the relationship between undervalued currency and trade deficit, additional, analysis the factors to cause the trade deficit.