Friday saw the Chinese yuan advance to its highest value in 19 years against the U.S. dollar as expectations grew for the nation to aggressively challenge seven consecutive quarters of economic struggles, according to Bloomberg.
The People's Bank of China strengthened the reference rate to its top level since August 22. The move comes as the nation hosting the globe's second-largest economy, trailing only that of the U.S., kicks off one week of observation for the National Day holiday beginning Monday.
"The economy is not doing so well and the government will implement new stimulus although the scale won't be as large as before due to concerns about some bubbles in the property market," foreign-exchange strategist Bruce Yam with Sun Hung Kai Financial told the news source. "The yuan will find it difficult to strengthen beyond 6.25 in the final quarter."
As the third quarter of 2012 closes, the renminbi has advanced 1.1 percent.
Demand for the yuan was climbing higher from corporate sources as banks moved forward in anticipation of National Day observance, according to Reuters.
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.