Chinese yuan likely to trade range bound for now; CFETS RMB index to consolidate at around 96.0: Scotiabank

The Chinese yuan is expected to range trade at the moment, with the CFETS RMB index consolidating at around 96.0 for now. Chinese Premier Li Keqiang said at a closed-door meeting on 4 March that one-way moves in the yuan exchange rate should be avoided, according to Bloomberg, according to a recent report from Scotiabank.

Moreover, China’s parliament on Sunday passed a constitutional amendment removing presidential term limits, which is beneficial to the stability of the country and the ruling party. The prospect of the ECB tapering will continue bolstering the EUR over the remainder of the year, suggesting a modestly stronger CNY given its tight correlation with the single currency.

Chinese Commerce Minister Zhong Shan said Sunday that China does not want a trade war and will not initiate one. He added any trade war with the US will only bring disaster to the world economy.

"We expect the two giants to negotiate a deal after US President Donald Trump on Thursday afternoon ET signed a pair of proclamations setting new tariffs of 25 percent on steel and 10 percent on aluminum," the report added.

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