The Chinese yuan rose against the US dollar today even though speculations about monetary stimulus from the central bank put pressure on the currency.
There were reports that the People’s Bank of China is going to start buying the local government’s debt in an effort to reignite economic growth. It is unlikely that the central bank will resort to a full-fledged quantitative easing as monetary conditions remain relatively tight, giving policy makers spare room to stimulate economy with conventional means. Despite the talks about stimulus, the yuan was resilient versus the dollar, which has been hurt by US economic data once again.
USD/CNY fell from 6.2190 to 6.2040 as of 17:03 GMT today.
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