China's Yuan Breaks Out of Narrow Range to Hit Three-Month High
(Bloomberg) -- China’s currency is showing signs of life again after barely budging for most of this month.
Over the past three days, the yuan has broken out of a December slumber to climb to a three-month high. Trading was choppy on Thursday, with the currency reversing a gain of 0.36 percent to trade 0.15 percent lower at 6.5874 as of 4:55 p.m. in Shanghai.
The currency was earlier given a lift by Wednesday’s statement following the annual Central Economic Work Conference, which didn’t repeat language on outright deleveraging from the previous two years. Instead, comments focused on risk in the financial system, signaling that’s where pressure will continue to be applied in the coming year.
“The messages from the conference helped to ease concerns over potential market volatility,” said Ken Cheung, Hong Kong-based senior strategist at Mizuho Bank Ltd. “The thin trade at year-end helped to amplify the impact of some buying flows.”
The yuan has climbed more than 5 percent this year against the dollar, recovering after slumping 11 percent in the past two years. Analysts tracked by Bloomberg at the end of 2016 had projected it would fall 2.6 percent.
The offshore yuan reversed an earlier advance of 0.27 percent to trade 0.19 percent lower at 6.5769.
To contact Bloomberg News staff for this story: Helen Sun in Shanghai at email@example.com.
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With assistance from Helen Sun