China’s renminbi has surged to its largest two-day increase on record despite expectations of continued weakness in the currency.
The FT reports that the offshore renminbi rose 2.6 per cent against the dollar to Rmb6.7853, marking its strongest position since the start of November, having been at a record low of Rmb6.9895 on Tuesday.
The strength of the renminbi weakened the dollar, pushing it to a three-week low against the yen at Y115.6.
Mansoor Mohi-uddin, strategist at RBS, says: “Renminbi weakness has been the most consensus trade to start the year – and with good reason – but liquidity in this market keeps getting lower and that just makes it more vulnerable. I don’t think the underlying weaker trend has changed, but these moves will have made people betting on that thinking about one-way risk.”