China's Pledge to Support Europe: Reading the Tea Leaves

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This week China told the world that it’s committed to helping Europe solve its debt crisis. Like a lot of official Chinese statements, what that means is open to interpretation. Financial markets chose to read the news as a sign of future financial commitment. The euro on Wednesday strengthened 0.3 percent, to $1.31, and Chinese stocks rose to a two-month high.The euro subsequently slid to $1.29 on Thursday morning before rising above $1.30 again.

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