China’s benchmark money-market rate fell to the lowest this year on speculation debt maturing in March will add funds to the banking system.
Yuan forwards jumped the most since January 2012 after China’s trade surplus almost doubled and the central bank boosted the currency’s daily reference rate.
The euro fell for a third week as measures of manufacturing and business confidence in the region signaled uneven economic growth, bolstering bets on further European Central Bank stimulus in June.
South Korea and Taiwan have declared a cease-fire in Asia’s currency wars.
Hong Kong should start a yuan deliverable forwards market to boost its ability to compete with Shanghai in renminbi trade and investment, said Frances Cheung , a senior strategist at Credit Agricole CIB.
Chinese policy makers have been saying since February that two-way swings in the yuan are the “new norm.” A surprise surge in the currency shows that they mean it.
Yuan 12-month non-deliverable forwards rose ahead of inflation data due Dec. 11 that may prompt China’s central bank to raise interest rates.
China’s money-market rates fell as the central bank drained less cash from the financial system than it added this week.
"Investors appear to be preparing for stronger-than-expected non-farm payrolls data."
- Frances Cheung on Jul 31, 2014