In line with recent policy changes (under the managed floating exchange-rate system) to strengthen the Singapore dollar, in 2011 the local currency will strengthen against the US dollar by nearly 8%, following annual average appreciation of 6.7% in 2010. However, as inflationary pressures ease over the remainder of the forecast period, there will be scope for the authorities to try to slow the currency's appreciation against the US dollar and the euro in order to maintain the city state's international competitiveness. Managing the exchange rate could be complicated by factors influencing the values of other currencies, notably China's renminbi, given the external pressure that is being exerted on the Chinese authorities to revalue their currency. Imbalances in the US and European economies could also lead to periods of turbulence for the US dollar and the euro, giving rise to volatility in Asian currency markets.