RMB complex rips higher

China’s yuan surged on Friday, set for its biggest weekly gain in 12 years, as a slide in the US dollar triggered repatriation of funds back to the mainland by real money investors. Hong Kong’s dollar climbed in tandem with the yuan.

Onshore yuan rose 0.82 per cent, breaking a key 6.45 resistance level to 6.4398 per dollar, which is its strongest since December 2015. It is poised for a weekly gain of 1.82 per cent, the biggest increase since July 2005. Offshore yuan advanced 0.42 per cent to 6.4590 per dollar, also the highest since December 2015.

“The offshore yuan market is crazy today, and we are really heading into unchartered territory,” said Stephen Innes, head of trading Asia Pacific at Oanda. “Real money is likely being repatriated back into China, and the central bank is not stepping in to stop this.”

Real money refers to actual cash being traded by investors, as opposed to money borrowed by the likes of hedge funds to speculate in the market.

South China Morning Post

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.

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. His views appear in Bloomberg, CNBC.Reuters, New York Times WSJ and the Economist. His media appearances include Bloomberg TV & Radio, BBC International, Sky TV, Channel News Asia, ASTRO AWANI and BFM Malaysia. 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