Yuan Matches 19-Year High as PBOC Raises Fixing for a Third Day
The yuan rose, touching a 19-year high, after the central bank raised the currency’s fixing for a third day amid optimism a recovery in the world’s second-largest economy is quickening.
Gross domestic product will probably increase more than 8 percent in 2013, China Securities Journal reported today, citing unidentified analysts. That’s higher than the 7.7 percent median estimate in a Bloomberg survey for growth in 2012. China’s economic recovery is a sign global demand will improve this year, Australian Treasurer Wayne Swan said yesterday before a visit to Hong Kong. The yuan has rallied 0.27 percent against the dollar in 2013, according to data compiled by Bloomberg.
“The appreciation trend will continue,” said Suan Teck Kin, an economist at United Overseas Bank Ltd. in Singapore. “We have moved past the stage of the worst in terms of economic growth and the question is about how fast it could expand.”
The yuan strengthened 0.05 percent to 6.2133 per dollar as of 9:44 a.m. in Shanghai, according to the China Foreign Exchange Trade System. It touched 6.2126 today and on Jan. 11, the highest level since the government unified official and market exchange rates at the end of 1993.
The People’s Bank of China set the yuan’s reference rate 0.03 percent stronger at 6.2695 per dollar. That’s 0.26 percent higher than the fixing on Dec. 31. The currency is allowed to trade as much as 1 percent on either side of the reference rate. Twelve-month non-deliverable forwards fell 0.06 percent to 6.2775, according to data compiled by Bloomberg.
In Hong Kong’s offshore market, the yuan advanced 0.08 percent to 6.1785 per dollar. It touched 6.1735 on Jan. 11, the strongest level since trading started in 2010.
One-month implied volatility for the yuan, a measure of expected moves in exchange rates used to price options, was unchanged at 1.75 percent, according to data compiled by Bloomberg.
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