A strong Chinese economy has sent yuan forwards up to fourteen-month highs.
Expectations are that China could soon allow the yuan to strengthen against the dollar.
This must be one of the biggest one-way bets in history, whereby it’s just a matter of time especially given the dollar’s weakness against most floating currencies.
Bloomberg: The exchange rate has been kept at about 6.83 per dollar since July 2008, following a 21 per cent gain in the previous three years, as the government favoured a stable currency to help exporters weather a global recession. Data due Oct. 22 will show the economy expanded 9 per cent in the third quarter, the fastest pace since September 2008, according to the median estimate of economists surveyed by Bloomberg.
The People’s Bank of China set its reference rate, around which the currency can trade by up to 0.5 per cent, at 6.8275 today, little changed from 6.8290 on Sept. 30. The spot rate was also steady at 6.8267, according to the China Foreign Exchange Trade System.