China’s Yuan Enjoying Record Surplus

China’s yuan headed for the biggest weekly advance since June as export growth that beat forecasts contributed to a record trade surplus.  Overseas shipments rose 14.5 percent from a year earlier in July, according to customs data today, compared with the median estimate in a Bloomberg survey for a 7 percent increase and June’s 7.2 percent advance. Imports fell 1.6 percent to give a trade surplus of $47.3 billion.

The yuan strengthened 0.38 percent this week to 6.1565 per dollar as of 11:03 a.m. in Shanghai, the biggest gain since the five days ended June 13, China Foreign Exchange Trade System prices show. The currency climbed 0.09 percent today.

“It’s quite clear sentiment on China has improved a lot,” said Eddie Cheung, a foreign-exchange strategist at Standard Chartered Plc in Hong Kong. The bank expects the currency to reach 6.09 per dollar by year-end, Cheung said.  The People’s Bank of China raised the yuan’s reference rate today by 0.18 percent, the most since July 10, to 6.1562 per dollar. That’s the strongest in almost three weeks.

Bloomberg