Yuan In Hong Kong Posts Biggest Weekly Advance Since April

June 19, 2015

NewsStandOnline.Net (19-June-2015): The offshore yuan traded freely in Hong Kong posted the biggest weekly gain since April ahead of talks between China and the U.S.

China’s pursuit of a market-determined currency will be on the agenda for the annual Strategic and Economic Dialogue to be held June 23-24, a Treasury official said yesterday. The U.S. agrees with the International Monetary Fund that the yuan is nearer its fair value, the official said. A dollar gauge fell to a one-month low after Federal Reserve Chair Janet Yellen said increases in U.S. borrowing costs will be gradual.

Yuan in Hong Kong Posts Biggest Weekly Advance Since April

“A relatively strong yuan will give China better bargaining power next week when it tries to convince the U.S. for its reserve-currency bid,” said Daniel Chan, analyst at Brilliant & Bright Investment Consultancy Ltd. “The weaker dollar also boosted the yuan this week.”

The offshore yuan climbed 0.14 percent from June 12, the biggest advance since the week through April 17, to 6.2073 a dollar as of 4:31 p.m. in Hong Kong, according to data compiled by Bloomberg. It declined 0.04 percent earlier today. In Shanghai, the yuan slipped 0.02 percent for the week to close at 6.2095, according to China Foreign Exchange Trade System prices.

The People’s Bank of China raised its daily reference rate by 0.04 percent to 6.1104 dollar, the strongest since May 19. The spot rate in mainland trading is limited to moves of 2 percent on either side of the fixing. The gap was 1.6 percent Friday.

Chinese officials have called for the IMF to include the yuan in its Special Drawing Rights basket at a review in October. PBOC Governor Zhou Xiaochuan said in April the central bank will make the yuan more freely usable.