Yuan Set for Longest Run of Gains Since 2015 on Fixing, GDP Data
EghtesadOnline: The onshore yuan rose for the sixth day in a row, the longest run of gains since 2015, boosted by a stronger central bank fixing and data showing China’s economy held up in the second quarter.
The yuan climbed 0.1 percent to 6.7683 per dollar as of 10:53 a.m. in Shanghai, extending its six-day advance to 0.6 percent. This came after the People’s Bank of China set its daily fixing at the strongest level since November. The offshore yuan was little changed at 6.7661, according to Bloomberg.
The nation’s gross domestic product increased 6.9 percent in the three months through June, beating a Bloomberg survey’s median forecast of 6.8 percent growth. June industrial output, fixed-asset investment and retail sales all surpassed estimates as well. China will carry on efforts to make the yuan more market-based, and it will push ahead with globalization of the currency in a steady manner, President Xi Jinping said at the two-day National Financial Work Conference that ended Saturday.
"The sentiment on the yuan is relatively good as the policy makers appear to favor a stable currency that fluctuates in a narrow range," said Tommy Xie, Singapore-based economist at Oversea-Chinese Banking Corp. "The yuan will be driven by the dollar throughout the rest of 2017, and there are no major domestic reasons for the currency to depreciate. It will end the year around 6.8 to 6.9 per dollar."
The onshore yuan rose 0.5 percent last week, rising to the strongest closing level in eight months as the Bloomberg Dollar Spot Index fell 1.3 percent, the most since mid-May. The median forecast in a Bloomberg survey is for the yuan to round up 2017 at 6.92 against the dollar.