Goldman Sachs Asset Management Chairman Jim O’Neill said China’s decision to widen the yuan’s trading band for the first time since 2007 increases his confidence that the Chinese economy will cool only gradually.
“It adds to my confidence in a soft landing,” O’Neill said in an email today. The change is positive for equities because it shows reformers are “in charge,” while “for FX it just means more volatility,” he said.
O’Neill coined the term BRIC in 2001 to describe Brazil, Russia, India and China. He predicted in a March 16 interview with Bloomberg Television that the Chinese government would allow bigger swings in the currency.