All sorts of news on the wires this week about China potentially widening its yuan trading bands, but UBS have come out with a forecast to say they expect it may happen in the next 3 days, and reported on Bloomberg.
China May Widen Yuan Trading Band Within 72 Hours: UBS
- Yuan is currently allowed to trade 1% either side of a daily official fixing
According to UBS:
“Signs are pretty clear that the PBOC is preparing a band widening very soon… a risk that it happens over the course of the next 72 hours, to coincide with the G-20 meetings being held in Washington D.C. and the first anniversary of the previous widening to plus or minus 1 percent.”
Thanks to Trend/line for the article
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Yuan has been fixed higher ahead of the G20 meetings (so China can avoid some criticism at the meetings) – widening the band may allow it to appreciate faster – but given how quickly its traded higher there is likely a reaction lower first – IMO).
