Chart of the day: Chinese yuan goes with the flow
The yuan-US dollar exchange rate sailed through resistance at 6.83 on Monday, not even pausing for breath, as the greenback rallied against just about all currencies. So far this year, the yuan has lost 5 per cent of its buying power against the dollar, roughly in line with other Asian currencies and faring far better than the British pound, which has shrunk 15 per cent against the greenback. Small signs of tension between the offshore and onshore Chinese foreign-exchange markets emerged last week on strong volume, but the differential has not been statistically significant. Momentum is as bullish as in January and should therefore propel prices towards our year-end target in the 6.89 area.
Nicole Elliott is a technical analyst