Published: 4 Jun at 2 PM Tags: Euro, Dollar, Pound Sterling, America, UK, Eurozone, USA, China, Switzerland,
With the Peoples Bank of China
strengthening the Yuan’s reference rate to a record the Yuan was able to climb for a second day.
After the central bank raised the Yuan’s reference rate by roughly 0.11 per cent (to a record 6.1735 Yuan per Dollar) the currency achieved 6.1286 against its American rival – just shy of last week’s 20 year high of 6.1220.
Yesterday Zhou Xiaochuan, Governor of the People’s Bank of China, asserted that the institution has no intention of deliberately devaluing the Yuan in order to improve competitiveness and official data showed that a gauge of capital inflows jumped by 294.4 billion Yuan in April. This followed a Q1 jump of 1.22 trillion Yuan.
According to one senior strategist, ‘There are still capital inflows coming in and that continues to put appreciation pressure on the Renminbi. The People’s Bank of China is accommodating that appreciation because if they don’t then the PBOC will be forced to intervene in the market and accumulate foreign exchange reserves that are already at a high level.’
However, Credit Agricole CIB was quoted as saying that the Yuan is likely to retreat soon as the rapid surge in the currency’s real effective exchange rate is proving damaging to China’s exporters.
Meanwhile, over in Europe the Pound was able to gain on several of its peers (notably advancing beyond 1.53 against the US Dollar) after UK construction returned to growth in May, the Swiss Franc weakened to 95.11 centimes per Dollar as the European session began and the Euro strengthened against its peers as Spanish unemployment change altered by significantly more than expected.
Yesterday the US Dollar broadly weakened as the odds of the Federal Reserve decreasing stimulus before the close of the year fell following the publication of disappointing manufacturing data.
As of Tuesday, 4th June 2013, the Pound Sterling currency rates mentioned within this news item were as follows:
GBP EUR exchange rate was 1.1705, GBP USD exchange rate was 1.5309, GBP CNY exchange rate was 9.3825, and GBP CHF exchange rate was 1.451.