“The move is not likely to have an immediate or large impact on the yuan,” Nizam Idris, head of foreign-exchange strategy for Asian markets at Macquarie Group Ltd., said in the article “The decision underlines China’s confidence that the economy is on a sound footing. We maintain the view that the yuan will continue to see pressure for appreciation.”
Idris projects the yuan will hit 6.10 to the dollar at the end of 2012, or a moderate 3.2% appreciation for the year. The yuan has been strengthening an average 4.4% over the past five years, but has dropped 0.1% so far this year, the third-worst performing currency in Asia.
Investors may access the Chinese currency through exchange traded products:
- WisdomTree Dreyfus Chinese Yuan Fund ETF (NYSEArca: CYB)
- Guggenheim CurrencyShares Chinese Renminbi Trust ETF (NYSEArca: FXCH)
- Market Vectors Chinese Renminbi/USD ETN (NYSEArca: CNY)
For more information on the Chinese currency, visit our Chinese yuan category.
Max Chen contributed to this article.