By Bloomberg News - Aug 18, 2010 10:20 AM GMT+0800
China’s yuan gained for a second day on speculation the central bank is seeking to encourage wider exchange-rate fluctuations and as other Asian currencies rallied.
The People’s Bank of China fixed the so-called central parity rate 0.12 percent stronger at 6.7895 per dollar, reflecting the dollar’s weakness against major currencies yesterday. The yuan, which has risen 0.5 percent since the central bank ended a dollar peg on June 19, is the second-best performer today among the 10 most-active Asian currencies excluding the Japanese yen.
“There will be bigger two-way fluctuations in the yuan,” said Huang Huawei, a foreign-exchange trader at Shenzhen Development Bank Co. in Shenzhen. “There is a strong correlation between the yuan and the dollar’s general performance.”
The yuan strengthened 0.06 percent to 6.7878 per dollar as of 9:51 a.m. in Shanghai, from 6.7921 yesterday, according to the China Foreign Exchange Trade System. Twelve-month non- deliverable forwards were little changed at 6.6770, reflecting bets the currency will advance 1.7 percent, according to data compiled by Bloomberg.
The currency fluctuated a minimum 0.15 percent on each of the last four trading days, following daily moves of less than 0.1 percent from July 5 through Aug. 11. The yuan is allowed to trade by up to 0.5 percent against the dollar either side of the reference rate.
--Judy Chen. Editors: Sandy Hendry
To contact Bloomberg News staff for this story: Judy Chen in Shanghai at +86-21-6104-7047 or xchen45@bloomberg.net.
From Bloomberg, published on Aug 18, 2010 10:20 AM GMT+0800