The Chinese Yuan is trading close to a two-year high following the release of manufacturing data which sparked speculation that foreign investors will increase their holdings of Chinese assets.
Early on Tuesday the Yuan softened slightly after the People’s Bank of China set the currency pairs parity rate higher than the one seen on Monday, the move came in response the rising strength of the Dollar.
“It appears that the central bank is happy to keep the Yuan in a narrow range, given the signs of stability in the domestic economy,” said a Shanghai-based trader at a local bank. “Policymakers are not compelled to weaken the Yuan too much.”
The Yuan is benefitting from the speculation that the Federal Reserve could choose to begin tapering its $85 billion monthly bond buying programme. Investors who are looking to ‘sit out’ the selloff are turning to the Yuan due to the currency’s stability.
“The Yuan is a prime candidate for safe-haven status as the Federal Reserve tapers its asset purchases. China doesn’t rely on US liquidity for its growth to a significant degree and is capable of achieving strong expansion without it,” said a strategist in Hong Kong.
Confidence is returning to the Chinese economy following the release of data which showed that manufacturing in the world’s second largest economy increased to a 16-month high in August. Both Goldman Sachs Group Inc and JPMorgan Chase&CO have raised their estimates for Chinese growth with Sachs raising theirs to 7.6% from 7.4%.
Current Yuan (CNY) Exchange Rates
The Pound Sterling/ Chinese Yuan Exchange Rate is currently in the region of: 9.5347
The Euro/Chinese Yuan Exchange Rate is currently in the region of: 8.0635
The US Dollar/Chinese Yuan Exchange Rate is currently in the region of: 6.1203
The Australian Dollar/Chinese Yuan Exchange Rate is currently in the region of: 5.5233
The New Zealand Dollar/Chinese Yuan Exchange Rate is currently in the region of: 4.7798
The Canadian Dollar/Chinese Yuan Exchange Rare is currently in the region of: 5.8065
(Correct as of 14:40 pm GMT)
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