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Yuan's largest daily leap in 10 months
By Feng Jianmin |
December 14, 2012, Friday
|
Print Edition
Print Edition
THE yuan yesterday made the largest daily leap in 10 months and ended a five-day run of weakness after the US unveiled more monetary easing measures that could lower the value of the dollar.
The yuan rose 0.3 percent to close at 6.2329 per dollar in Shanghai, according to the China Foreign Exchange Trade System. That is 0.9 percent higher than the People's Bank of China's reference rate. The yuan can trade within a maximum 1 percent on either side of the fixing.
The yuan's appreciation occurred as emerging market currencies also firmed up for the US' asset purchasing plan may raise investors' risk appetite and spur demand for assets in those markets.
The Federal Reserve said the ultra-accommodative stance will remain in place "at least" until US unemployment falls below 6.5 percent and if inflation is projected at no more than 2.5 percent.
"The US decision of monetary easing may drive up commodity prices and increase inflationary pressure on China," said Xie Zuoshi, a professor with Zhejiang University of Finance & Economics. "The yuan will be more likely to strengthen as China will have to keep its monetary policies stable."
A report by the Bank of China said on Wednesday the yuan may gain 3 percent next year to 6.06 against the dollar. Further easing measures by major economies and relatively higher interest rates in emerging markets, including China, will lure capital to the country.
The yuan rose 0.3 percent to close at 6.2329 per dollar in Shanghai, according to the China Foreign Exchange Trade System. That is 0.9 percent higher than the People's Bank of China's reference rate. The yuan can trade within a maximum 1 percent on either side of the fixing.
The yuan's appreciation occurred as emerging market currencies also firmed up for the US' asset purchasing plan may raise investors' risk appetite and spur demand for assets in those markets.
The Federal Reserve said the ultra-accommodative stance will remain in place "at least" until US unemployment falls below 6.5 percent and if inflation is projected at no more than 2.5 percent.
"The US decision of monetary easing may drive up commodity prices and increase inflationary pressure on China," said Xie Zuoshi, a professor with Zhejiang University of Finance & Economics. "The yuan will be more likely to strengthen as China will have to keep its monetary policies stable."
A report by the Bank of China said on Wednesday the yuan may gain 3 percent next year to 6.06 against the dollar. Further easing measures by major economies and relatively higher interest rates in emerging markets, including China, will lure capital to the country.
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