The China’s yuan extended its gains for the fourth day after data indicated that factory output accelerated in June. The official Purchasing Managers’ Index for manufacturing stood at 51 for June, the most since December.
A separate index by Markit Economics and HSBC Holdings Plc surged to the highest level in seven months of 50.7. Moreover, authorities raised the capacity of banks to give out loans by altering the way loan-to-deposit ratios are calculated.
The yuan surged 0.05 percent to trade at 6.2016 per dollar. The currency has gained 0.53 percent since June 25, and rallied to 6.1970 earlier, its highest point since April 9.
“The economy has turned up and recent data has improved,” Irene Cheung, a strategist at Australia & New Zealand Banking Group Ltd in Singapore, told Bloomberg. “The latest move by the banking regulator to relax the computation of the loan-to-deposit ratio yesterday would also be a move to support growth.”
The People’s Bank of China increased the yuan’s daily fixing 0.01 percent higher to 6.1523 per U.S. dollar; with the yuan trading 0.8 percent lower than the reference rate. The offshore yuan surged 0.03 percent to trade at 6.2066 per dollar in Hong Kong.
The yuan’s 12-month non-deliverable forwards surged 0.04 percent to 6.2250, while the onshore yuan’s 1-month implied volatility, which measures the expected shifts in the exchange rate that is used to assign price to options, remained steady at 1.40 percent.
The Indonesian rupiah ended its run of advances after a report showed that exports declined by the largest margin in over a year in May. The rupiah plunged 0.4 percent to trade at 11,903 at 12:46 p.m. local time.
Exports fell 8.11 percent from a year ago, the most since April 2013, reported the Statistics Office. However, the trade balance was surprisingly a surplus. To register for a free 2-week subscription to ForexMinute Premium Plan, visit www.forexminute.com/newsletter.
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