The Chinese yuan pushed to its 20-year peak on Monday against the world's reserve currency after the U.S. Labor Department's release of weaker-than-anticipated jobs data late last week raises questions about the next steps of monetary policy, according to Bloomberg.
The People's Bank of China boosted the daily reference rate by 0.1 percent. China's trade surplus in December rose to $25.6 billion, according to official data released in the end of last week.
"The broader market environment of capital retreating from emerging markets would reduce the pressure of appreciation of the yuan this year," economist Kevin Lau with Standard Chartered told The South China Morning Post on Monday. "Meanwhile, as foreign investors hold a consensus view that China's economic growth would maintain at a low 7 per cent, that would somehow help curb the hot money inflows."
The renminbi pushed ahead 0.14 percent against the greenback, touching its highest value since 1998 against the dollar.
The yuan notched gains of 2.9 percent against the U.S. dollar in 2013, according to The South China Morning Post.
Risk Disclosure
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.
