Forex Blog: Currency Trading News & Analysis.

July 30th 2005

Bank of China: no schedule for revaluation

Since its revaluation, the Chinese Yuan has not fluctuated, leading some traders to joke ‘Yuan’ should be spelled ‘Yawn.’ China’s Central Bank has reinforced this stasis by informing the public it has no intentions to re-adjust the peg in the near-term. Nonetheless, many forex traders are still optimistic that further revaluation(s) will be carried out within the next 12 months, with a consensus expectation of 4%-6%. Non-deliverable forward contracts indicate an expected 4% appreciation, down from 6.5% last week. In order to discourage traders and speculators from maintaining long positions on the Yuan in anticipation of further revaluation, the Bank of China recently lowered short-term interest rates, meaning it is now more expensive-in real terms-to hold Yuan rather than USD. The Wall Street Journal reports:

Others who expect the yuan to appreciate this year cite China’s large, growing trade surplus with the U.S. and what they say could be renewed political pressure from the U.S. sooner than most expected.

Read More: After the Yuan Step, Traders Now Await Beijing’s Next Move

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Posted by Adam Kritzer | in Chinese Yuan (RMB), Investing & Trading | No Comments »

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© 2004 - 2024 Forex Currency charts © their sources. While we aim to analyze and try to forceast the forex markets, none of what we publish should be taken as personalized investment advice. Forex exchange rates depend on many factors like monetary policy, currency inflation, and geo-political risks that may not be forseen. Forex trading & investing involves a significant risk of loss.