Yuan powers ahead after hitting 7-month high
Both HSBC and Morgan Stanley raise their yuan forecasts to 6.9 to the US dollar by year-end
The yuan powered further ahead against the US dollar on Tuesday, after hitting its strongest level in seven months the previous session.
And analysts still predict the Chinese currency to rise further in the near term, as the Beijing authorities try to moderate one-way yuan depreciation expectations in the market.
In the spot market in Shanghai, the US dollar traded at 6.7972 per yuan as of 5.40pm, weaker by 0.1 per cent from 6.804 late Monday.
In the offshore yuan market in Hong Kong, the US currency bought 6.7689 per yuan, down 0.2 per cent from 6.7817 late Monday.
Earlier in the day, the People’s Bank of China (PBOC) raised the yuan’s daily fixing rate to 6.7934 per US dollar, stronger by 1 basis point from the previous day’s rate.
Market participants consider the PBOC will follow suit if the US Federal Reserve raises its interest rates as expected this month
On Monday, the PBOC set the yuan’s daily fixing rate firmer below the 6.8 level for the first time since November. It sparked a rally in the onshore yuan, which also jumped on Monday to the highest level in seven months.