The value of the monetary unit of China minimally strengthened on Thursday against the U.S. dollar as speculation mounted about the central bank of the Asian nation preparing to intervene to spur the globe's second-largest economy, according to The Wall Street Journal.
The People's Bank of China on Thursday established a central parity rate that was higher than the Wednesday evening rate. With one-plus week remaining in the year, the yuan has achieved gains of roughly 1 percent against the world's reserve currency in 2012.
"Some Chinese banks bought large amount of dollar yesterday, very likely on behalf of the central bank," a Shanghai-based foreign bank trader told The Wall Street Journal on Thursday. "So traders don't dare to continue to sell the dollar today, in case such dollar bids surface again."
Bloomberg reports the PBOC noted in an editorial in state-owned media that it will handle worldwide monetary easing by central banks by increasing the yuan's exchange rate.
An editorial in Xinhua News Agency indicated the central bank of China is set to aid businesses' borrowing needs, which will assist the growth of its monetary base.
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.