December 31, 2010
Yuan Set for Fifth Weekly Gain as China Seeks to Tame Inflation
The yuan headed for its fifth weekly gain, trading near a 17-year high, on speculation China’s policy makers will allow the currency to gain in an effort to tame inflation
The renminbi climbed 0.33 percent in the past five days, reaching 6.6008 per dollar yesterday, the strongest level since China unified official and market exchange rates at the end of 1993. The People’s Bank of China set the reference rate at the strongest level since ending a dollar peg in July 2005. The yuan will continue to gain, advancing 6 percent next year, said David Cohen, an economist at Action Economics Ltd. in Singapore.
Policy makers “recognize the usefulness of a stronger currency in curbing inflation,” said Cohen. “The yuan, like other Asian currencies, has very strong fundamentals and the country has a very large current account surplus.”
The yuan was little changed today at 6.6049 per dollar as of 10:35 a.m. in Shanghai, according to the China Foreign Exchange Trade System. Twelve-month non-deliverable forwards advanced 0.17 percent to 6.4500, reflecting bets the Chinese currency will gain 2.3 percent in a year.
The PBOC set its daily reference rate higher for the ninth day, at 6.6227 per dollar today compared to 6.6229 yesterday. The yuan is allowed to trade by up to 0.5 percent either side of the so-called central parity rate. The U.S. Dollar Index, a gauge of the greenback’s strength, retreated for the seventh day.
China’s consumer prices climbed 5.1 percent from a year earlier in November, the biggest gain in 28 months, the statistics bureau said on Dec. 11. The yuan is a denomination of China’s currency, the renminbi.
http://www.businessweek.com/news/2010-12-30/yuan-set-for-fifth-weekly-gain-as-china-seeks-to-tame-inflation.html
Yuan Set for Fifth Weekly Gain as China Seeks to Tame Inflation
The yuan headed for its fifth weekly gain, trading near a 17-year high, on speculation China’s policy makers will allow the currency to gain in an effort to tame inflation
The renminbi climbed 0.33 percent in the past five days, reaching 6.6008 per dollar yesterday, the strongest level since China unified official and market exchange rates at the end of 1993. The People’s Bank of China set the reference rate at the strongest level since ending a dollar peg in July 2005. The yuan will continue to gain, advancing 6 percent next year, said David Cohen, an economist at Action Economics Ltd. in Singapore.
Policy makers “recognize the usefulness of a stronger currency in curbing inflation,” said Cohen. “The yuan, like other Asian currencies, has very strong fundamentals and the country has a very large current account surplus.”
The yuan was little changed today at 6.6049 per dollar as of 10:35 a.m. in Shanghai, according to the China Foreign Exchange Trade System. Twelve-month non-deliverable forwards advanced 0.17 percent to 6.4500, reflecting bets the Chinese currency will gain 2.3 percent in a year.
The PBOC set its daily reference rate higher for the ninth day, at 6.6227 per dollar today compared to 6.6229 yesterday. The yuan is allowed to trade by up to 0.5 percent either side of the so-called central parity rate. The U.S. Dollar Index, a gauge of the greenback’s strength, retreated for the seventh day.
China’s consumer prices climbed 5.1 percent from a year earlier in November, the biggest gain in 28 months, the statistics bureau said on Dec. 11. The yuan is a denomination of China’s currency, the renminbi.
http://www.businessweek.com/news/2010-12-30/yuan-set-for-fifth-weekly-gain-as-china-seeks-to-tame-inflation.html
