The yuan closed higher on Thursday, moving around key resistance at 6.30 against the dollar and looks set for a break of that level soon partly buoyed by a stronger mid-point fixing by the People's Bank of China, traders said. The market expects the yuan to stage another leg of modest appreciation ahead of a visit to the United States by Chinese leader-in-waiting Xi Jinping in mid-February and to topple its historical trading record high of 6.2919 set in early January.
The new round of appreciation, however, will not herald a steep rise in the Chinese currency this year as China evaluates the impact on its exports from a weak global economy. Spot yuan closed at 6.3018 versus the dollar after touching an intraday high of 6.2980, up from Wednesday's close of 6.3067 after the PBOC fixed a slightly stronger mid-point of 6.3075 against Wednesday's 6.3103. In the offshore non-deliverable forward market, one-year NDFs traded at 6.2700 in afternoon trade, implying 0.60 percent yuan appreciation over the next year, compared with a 0.53 percent rise implied at Tuesday's close.
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