Yuan Forwards Strengthen on Speculation China to Allow Gains |
| BusinessWeek - Mar 23, 2010 |
Yuan forwards strengthened, rebounding from the lowest level this year, on speculation China will allow appreciation to help contain inflation as foreigners’ criticism of its fixed exchange rate mounts.
Premier Wen Jiabao yesterday appealed to chief executive officers of overseas companies gathered in Beijing to help the world avoid a trade war as U.S. lawmakers call for tougher measures to force China to revalue the yuan. China has stopped the yuan from strengthening since July 2008, following a 21 percent gain over three years, to help its exporters cope with a slump in global demand.
“The market is still betting foreign pressure and inflation expectations will persuade China to drop the dollar peg,” said Liu Dongliang, a Shenzhen-based foreign-exchange analyst at China Merchants Bank Co., the country’s fifth-largest lender by market value. “But we probably won’t see appreciation before the pressure subsides because China doesn’t want to yield to anyone.”
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- Posted: 2010-03-23 10:08:18
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