Focus again turns on Yuan as Dollar strengthens

Focus is likely to turn towards Chinese currency once more this week, as Dollar has started strengthening against Yuan after its post-FOMC dip. After last to last week’s FOMC meeting announcement, which saw cutback in hike expectations by 50 basis points, Yuan traded as low as 6.436 per Dollar, a level not seen since November.

But after last week, that move seems history.

In past six trading session, Yuan has depreciated steadily to 6.522 per Dollar, completing its biggest weekly decline since January, that opened up massive volatility in global markets. So far it hasn’t created any major market jolts, as Dollar strengthen broad based.

So focus for this week will be on Yuan’s move against Dollar, whether or not it has depreciating agenda of its own. So far today, it is up 0.06% against Dollar, underperforming emerging market currencies such as Indian Rupee, which is up +0.48% today. Indonesian Rupiah, Korean Won, Singapore Dollar, Hong Kong Dollar all have outperformed Yuan today.

So would it be investors are once more pouring money in to emerging markets in Asia but China. Especial focus will be on PMI reports to be released on Friday.