Bloomberg News

Yuan Strengthens as U.S. Recovery Signs Improve Exports Outlook

March 02, 2012

The yuan rose after U.S. employment data added to evidence of improvement in the world’s largest economy, brightening the outlook for China’s exports and fueling demand for emerging-market assets.

U.S. initial jobless claims fell 2,000 to 351,000 in the week through Feb. 25, matching a four-year low reached in early February. China’s manufacturing growth picked up for a third month in February, official data showed yesterday.

“The U.S. jobs data is encouraging and implies stronger demand for Chinese exports,” said Daniel Chan, chief economist at BWC Capital Markets in Hong Kong. “The yuan will continue its gradual appreciation pace when global growth looks more resilient.”

The yuan rose 0.03 percent to 6.2982 per dollar as of 4:30 p.m. in Shanghai, according to the China Foreign Exchange Trade System. The currency was little changed this week. The People’s Bank of China raised the reference rate 0.06 percent to 6.2980 today. The currency is allowed to trade 0.5 percent either side of the daily fixing.

In Hong Kong’s offshore market, the yuan gained 0.01 percent today to 6.2960. Twelve-month non-deliverable forwards advanced 0.07 percent to 6.2818, a 0.3 percent premium to the onshore spot rate, according to data compiled by Bloomberg.

Measures to increase the amount of yuan offshore will probably be discussed by Chinese lawmakers next week during annual legislative meetings in Beijing, said Fang Fang, JPMorgan Chase & Co.’s chief executive officer of China investment banking. He will be attending as a member of the Chinese People’s Political Consultative Conference, an advisory group to the government that meets in parallel to the lawmakers that are delegates to the National People’s Congress.

To contact the reporter on this story: Fion Li in Hong Kong at fli59@bloomberg.net

To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net


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