The yuan closed at a new post-revaluation high against the dollar on Friday, tracking currencies such as the yen in a strengthening trend, despite uncertainty over the Chinese currency's direction next week.
The yuan, which was revalued by 2.1 percent on July 21 to 8.11, closed at 8.0980 and has now appreciated almost 0.15 percent - tiny by global standards but significantly more than the infinitesimal moves it was allowed before the policy change.
Traders were unsure if there was central bank intervention in the afternoon. Some expected the currency to continue strengthening next week, while others said much would depend on global currency action, now that the central bank had disclosed the basket of currencies against which the yuan would be managed.
Central bank interventions are not easy to detect in the yuan market, but dealers said that the People's Bank of China had tended to push the currency down this week whenever it approached a peak. That signalled a reluctance to let the yuan climb too sharply for now. "We can't eliminate the possibility that the People's Bank intervened today, though on other days the signs of intervention have been stronger," said a trader with a major European bank in Shanghai.
The currency is allowed to strengthen or weaken by 0.3 percent daily, though it has yet to come even close to using up that leeway.
Comments
Comments are closed.