Yuan growth expected to be regulated
Even though individuals cannot trade the Chinese yuan on the currency market, it still has an effect on a number of other currency performances, as well as being a major player in the dynamics of financial markets and currency interactions. Many are hoping that the Chinese yuan will begin appreciating as the economy picks up, but the truth is that things are likely to be tightly regulated.
However, there are other implications for other currencies. GFT’s Boris Schlossberg reports in FX360 on the effect Chinese growth will have on the Aussie:
However, given the history of Chinese currency management we believe that any appreciation in the yuan will be gradual and measured at best, as authorities make sure that the rise does not hurt the prospects further growth. A rise in the yuan should help boost domestic demand, assuming global recovery trends remain on track and one side beneficiary of this dynamic will the Aussie as Chinese investors continue to pour capital into the country’s natural and real estate resources.
Indeed, the forex trading forecast shows more support for the Aussie right now. While there is some downside risk, and the upside is likely to be somewhat limited going forward, there is still no getting around the fact that the Aussie just reached a yearly high against the U.S. dollar.
0 comments:
Post a Comment