Hong Kong • Gains in China’s currency accelerated sharply in overnight trading yesterday, with the yuan surging the most in seven months against the greenback.
Traders struggled to find a reason for the 0.65% jump, with one noting that moves can be exaggerated amid thin liquidity in the overnight session.
The advance comes against a back-drop of increasing strength — even before Monday’s gains, the yuan was the best performer in Asia this month.
China’s currency has turned around in 2017 — after three years of losses — helped by curbs on capital outflows, dollar weakness and a stabilising economy.
The central bank appears to see no issue with the appreciation: It’s been setting the currency fixing at the strongest levels in a year this week.
The yuan continued to strengthen, gaining beyond 6.6 per dollar for the first time since June 2016. It went as far as 6.5986 before easing back to 6.6045 as of 3:42pm in Shanghai yesterday.
The offshore yuan climbed 0.2% to 6.6027, rising for a 10th day, the longest streak in almost seven years.
The Bloomberg Dollar Spot index slid 0.3% yesterday and it was at its lowest since January 2015.