After a weeklong Lunar New Year holiday, Chinese Renminbi woke up today much stronger, majorly due to broad based weakness in Dollar. China's central bank, People's bank of China (PBoC) responded to weaker Dollar today and strengthened Yuan fix by 0.3% higher at 6.5118 per Dollar.

As we write this, Yuan is on its way to strengthen more. Onshore Yuan is currently trading at 6.491 per Dollar, up 1.23%. In January, it traded as high as 6.6 per Dollar over capital flow concern and spread between onshore and offshore counterpart reached above 2%. However, with today's move Yuan has almost recovered all of its loss for this year. Today's move stands strongest since 21st July, 2005, When Yuan strengthened by more than 2%.

To add to the good news, after quite a long time, offshore Yuan is trading stronger compared to onshore counterpart but only marginal. Yuan is currently trading at 6.488 per Dollar in offshore market. Over the weekend, PBoC governor said that there exists no basis for continued Yuan depreciation and also said he isn't much worried overfalling FX reserve as they are still quite large.

Key questions stand now, will this last? Will global markets reverse course if Yuan stops depreciating?