China’s yuan headed for its biggest weekly rally in more than two years on speculation the central bank will tolerate gains after the trade surplus widened.
The People’s Bank of China strengthened the reference rate 0.2 percent since June 6, the biggest weekly advance this year, and set it at 6.1503 per dollar today. China reported its biggest monthly trade excess in five years on June 8 and will release industrial production and retail sales data for May today that is forecast to be better than the month before, according to Bloomberg surveys. The U.S.-China Strategic and Economic Dialogue will be held in Beijing in early July.
“Our view is that better economic data and international diplomacy are at play here,” Bank of America Merrill Lynch strategists including Claudio Piron in Singapore and Albert Leung in Hong Kong wrote in a research note today. The stronger yuan fixings “are consistent with some stabilization in macro data,” they said.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.