Pressure is building on the onshore yuan to weaken past an unofficial line in the sand for policymakers and this time traders are keeping as close an eye on happenings in Japan as they are Stateside.
A closely-watched support level has formed at 7.20 per dollar, a level that hasn’t been breached since November, thanks in part to stronger-than-expected daily reference rates for the managed currency and state-owned banks stepping into the market when it is neared. Any indication Beijing will allow the currency to cross the line would be a signal to investors looking for further evidence of a government stepping up efforts to boost China’s spluttering economy, according to strategists.
