The Chinese yuan rose against the US dollar today. The reason for the gain was not like usual factors that drive the currency market but rather a direct influence of the nation’s central bank. The yuan fell versus the euro.
Today, the Peopleâs Bank of China set the daily reference rate for the currency at the strongest level in three months. While the recent stream of underwhelming economic data and news about stimulus might have driven other currency down, the yuan is a different story as it is not free-floating. Instead, it is allowed to trade 2 percent above or below the level set by the central bank.
It looks like China is not going the route taken by many other countries that used depreciation of their currencies as a mean to bolster economy. Experts say that China’s authorities made it clear that they are not going to use devaluation of the currency as a monetary tool to bolster economic growth.
USD/CNY fell from 6.1970 to 6.1935 as of 19:05 GMT today after rising to the daily high of 6.2073 earlier. At the same time, EUR/CNY went up from 6.7074 to 6.7315.
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