Yuan Surges in APAC

The Chinese yuan strengthened in early Asian trade on Tuesday in what analysts see as the country’s attempt to engineer market stability one week before a key political gathering in Beijing.

The U.S. dollar/yuan pair was trading around 6.597 at 10:10am HK/SIN, compared with 6.6147 at the close of the previous session.

The strength of the Chinese currency contributed to overall weakness of the greenback, with the dollar index trading 0.2 percent lower.

“The driving force behind the dollar sell-off on Tuesday was the climb higher in the yuan,” said Stephen Innes, APAC head of trading at OANDA.

With the 19th party Congress expected on Oct. 18, China’s central bank was likely attempting to provide “overriding stability” in the market and a better platform to encourage foreign investment into China, he added.

China’s central bank governor Zhou Xiaochuan said in an interview with financial magazine Caijing that the country must press on with a “trinity of reforms” that include free trade and investment, letting the market decide yuan’s value and doing away with capital account controls.

CNBC

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Stephen Innes

Stephen Innes

Head of Trading APAC at OANDA
Stephen has over 25 years of experience in the financial markets and currently based in Singapore as the Head of Trading Asia Pacific with OANDA. Stephen's market views focus on the movement of G-10 and ASEAN Currencies. Stephen has an extensive trading experience in Spot and Forward FX, Currency and Interest Rate Futures, Money Market Derivatives and Precious Metals. Before joining OANDA, he worked with organisations like Nat West, Chemical Bank, Garvin Guy Butler, and Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes
Stephen Innes

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