Yuan forwards were within 0.1 percent of a record high and set for a fourth weekly gain after the central bank said the currency’s trading band will be widened soon.
Twelve-month non-deliverable forwards traded at 6.2465 per dollar as of 9:32 a.m. in Hong Kong, little changed from 6.2475 yesterday, according to data compiled by Bloomberg. They touched 6.2423 on April 17, the strongest level in data going back to 1998. The People’s Bank of China lowered its daily reference rate by 0.03 percent today to 6.2395. The currency, which is allowed to fluctuate a maximum 1 percent on either side of the fixing, rose 0.04 percent to 6.1788 in Shanghai.
China will probably widen the yuan’s trading band by the end of the coming weekend after People’s Bank of China Deputy Governor Yi Gang signaled policy makers will loosen control over the currency, according to UBS AG. The move may be announced as finance chiefs from the Group of 20 nations meet in Washington this week, UBS analysts Manik Narain and Geoffrey Yu wrote in a note.
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