Economy is picking up pace

China currency nudges toward best quarter since 1981

China is witnessing a rapid advance in the yuan, as traders push the currency toward its largest quarterly numbers on record. The yuan has strengthened 4.4 per cent since the end of June to 6.7620 per dollar, set for the biggest ever quarterly gain since 1981.

The currency is the best performer in Asia in the third quarter, with the buying momentum close to the strongest since January.

The rise of the yuan is being supported by a slump in the dollar, while Chinese media has been attributing the gains to the nation’s economic recovery. The People’s Bank of China has also helped by not standing in its way, which for some in the market is an incentive for the currency to push higher. Beijing’s daily fixings have tracked the spot rate, and officials have not expressed any concern over the currency’s strength.

“There is scope for further yuan gains before the authorities start to become concerned about excessive strength,” Khoon Goh, head of Asia research at Australia & New Zealand Banking Group told scmp.com, adding that a lack of pushback from Beijing has encouraged him to become more bullish. “It is very likely that the yuan will hit 6.7 in the near term.”


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