The Chinese yuan spiked to a 11-month high on hike speculation given China’s strong export rebound (up 21% year over year in January), which allows leeway to inflict some currency discomfort on China’s export industry:
The currency gained 0.07 per cent to 6.8280 per dollar as of 10:24 a.m. in Shanghai, the biggest gain since March 2009, according to China Foreign Exchange Trade System. That’s the third fluctuation of 0.05 per cent or more in four trading days, the same tally as for the previous seven months. Local financial markets were closed last week for the Lunar New Year holiday.
Twelve-month non-deliverable forwards climbed 0.2 per cent to 6.6425, indicating bets the yuan will rise 2.8 per cent in a year. Zhao forecast the yuan will strengthen no more than 3 per cent against the dollar this year.
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