China’s yuan is poised to complete the fifth straight quarter of gains on stronger central bank fixings amid signs Asia’s largest economy is recovering from a slowdown.
Manufacturing activity increased for the second month in September while exports advanced for a second straight month in August. The People’s Bank of China raised its daily reference rate, which limits the yuan’s daily moves to 1 percent on either side, by 0.5 percent to 6.1480 this quarter. The currency’s appreciation has slowed since June 28 after gaining the most since 2011 in the previous three months amid a liquidity squeeze engineered by authorities to curb excessive lending.
“The yuan was supported by improving growth momentum,” said Andy Ji, a Singapore-based currency strategist at Commonwealth Bank of Australia. “Onshore demand for the yuan is not as strong as a quarter ago due to the liquidity crunch.”
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