Forex Flash: China to head towards market-determined exchange rate - BTMU

FXstreet.com (Barcelona) - Lee Hardman, FX analyst at the Bank of Tokyo Mitsubishi UFJ notes that the Deputy Governor of the PBoC Yi Gang gave a strong signal yesterday that China will continue to move towards a more market-determined exchange rate system.

He adds that he stated that the yuan’s daily trading band will be widened “in the near future”. He writes, “He now expects the USD/CNY daily trading band to be widened to +/- 2.0% at the start of Q3 from our initial forecast of at the start of Q4. He writes, “A stronger yuan over the next six to twelve months should support Asian currencies more broadly ahead.”