Yuan strengthens

January 21, 2018

Reuters Shanghai

China´s yuan extended gains against the U.S. dollar on Friday to breach the key 6.4 per dollar level for the first time in more than two years, underpinned by broad weakness in the greenback. The Chinese currency looked set for its sixth straight weekly gain, the longest winning streak since January 2017. The renminbi has risen 1.8 percent on the dollar so far this year, after climbing around 6.8 percent in 2017 that reversed three straight years of depreciation. "We still believe that the People´s Bank of China (PBOC) will likely keep (the yuan) mostly stable against the basket for the next couple of years, leaving CNY pivotingmostly on USD movements," Wang Tao, chief China economist at UBS Investment Research said in a note. "Should the USD weaken further, CNY may appreciate even more against USD this year, though likely not fully matching USD weakness in order to accumulate some buffer," she added. _