9/9/10
China: Yuan strengthens for first time in three days before trade data
The yuan rose for the first time in three days on speculation China’s central bank will be more inclined to allow the currency to strengthen as the trade surplus increases.
A government report tomorrow will show exports exceeded imports by $26.9 billion in August, compared with $15.7 billion in the same month a year earlier, according to the median estimate of 34 economists surveyed by Bloomberg News. Shipments climbed 35 percent and imports grew 27.5 percent, the survey showed. U.S. Treasury Secretary Timothy F. Geithner said yesterday that China should let the yuan rise more quickly.
“With the trade surplus staying at such a high level, the government will accelerate yuan appreciation,” said Shen Jianguang, a Hong Kong-based economist at Mizuho Securities Asia Ltd.
The currency gained 0.16 percent to 6.7832 per dollar as of 5:30 p.m. in Shanghai, according to the China Foreign Exchange Trade System. Shen estimated the yuan will advance to 6.6 by the end of the year.
Twelve-month non-deliverable forwards rose 0.2 percent to 6.6992, reflecting bets the currency will strengthen 1.3 percent in a year, according to data compiled by Bloomberg.
China abandoned a fixed-peg to the U.S. currency on June 19 and has since allowed the yuan to gain 0.6 percent.
“Frankly, they haven’t let the currency move very much so far,” Geithner said in an interview on Bloomberg Television in Washington. “They know they’re just at the beginning of that process and I think we’d like to see them move more quickly.”
Source: businessweek.com
China: Yuan strengthens for first time in three days before trade data
The yuan rose for the first time in three days on speculation China’s central bank will be more inclined to allow the currency to strengthen as the trade surplus increases.
A government report tomorrow will show exports exceeded imports by $26.9 billion in August, compared with $15.7 billion in the same month a year earlier, according to the median estimate of 34 economists surveyed by Bloomberg News. Shipments climbed 35 percent and imports grew 27.5 percent, the survey showed. U.S. Treasury Secretary Timothy F. Geithner said yesterday that China should let the yuan rise more quickly.
“With the trade surplus staying at such a high level, the government will accelerate yuan appreciation,” said Shen Jianguang, a Hong Kong-based economist at Mizuho Securities Asia Ltd.
The currency gained 0.16 percent to 6.7832 per dollar as of 5:30 p.m. in Shanghai, according to the China Foreign Exchange Trade System. Shen estimated the yuan will advance to 6.6 by the end of the year.
Twelve-month non-deliverable forwards rose 0.2 percent to 6.6992, reflecting bets the currency will strengthen 1.3 percent in a year, according to data compiled by Bloomberg.
China abandoned a fixed-peg to the U.S. currency on June 19 and has since allowed the yuan to gain 0.6 percent.
“Frankly, they haven’t let the currency move very much so far,” Geithner said in an interview on Bloomberg Television in Washington. “They know they’re just at the beginning of that process and I think we’d like to see them move more quickly.”
Source: businessweek.com