Strongest Yuan in Two Years Tests China’s Tolerance for Gains
- Currency has been trading at levels stronger than the fixing
- Beijing already made building short bets cheaper to slow gains
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Traders are testing China’s tolerance for a strong yuan, which keeps rallying no matter what officials do to rein in appreciation.
The currency climbed as much as 0.55% to its strongest since July 2018 on Wednesday, even after the People’s Bank of China set its daily reference rate weaker than analysts had expected. Traders have pushed the yuan stronger than the so-called fixing for six days, a sign of confidence that it will continue to rally.