China's yuan strengthened against the dollar on Monday, the first day it resumed trading after a week-long holiday, as the US currency lost ground globally.
The yuan closed at 8.0070 to the dollar versus 8.0140 on April 28 when it last traded, after the central bank set its mid-point at a stronger 8.0090 from 8.0165.
The move came as the dollar hit an eight-month low against the yen after a top US Treasury official suggested that Japanese poliymakers should refrain from intervening verbally on currencies.
"A soft US currency helped push up the yuan today and the Chinese currency has a chance to breach the 8.0000 level in the coming days," said a Shanghai trader.
The yuan has now appreciated a further 1.3 percent since it was revalued by 2.1 percent against the dollar last July and freed from a dollar peg to float within managed bands.
But China's major trading partners, such as the United States, have been pushing for a flexible forex regime that will tolerate a faster appreciation of the yuan.
In its Asian economic outlook, the IMF said increasing attention has been focused on how to rebalance China's economy away from a heavy dependence on exports in favour of domestic demand as an engine of growth. On Monday, one-year onshore yuan forwards were quoted at 7.78 per dollar, anticipating that the yuan will be 2.9 percent stronger in a year's time.
Comments
Comments are closed.