Reuters survey says…Renminbi sees first bullish bets in four months

In what could be taken as a decent sign for upward momentum in volatility and thus volumes in the FX market is the return of chips being placed on appreciation of the Chinese currency after a period of consolidation and weakness driven by the PBOC’s  hesitation to let speculators take over the currency.

Brokers who have added USD/CNH liquidity could stand to reap rewards of renewed interest in traders participating in the slow winding road of yuan strength. More coverage from analysts of the renminbi market would help spark trader’s interest even more so.

A Reuters poll showed on Thursday the first bullish bets are being seen on China’s yuan in four months as the currency is showing signs of stabilizing. Sentiment on the yuan turned bullish after persistent pessimism since mid-February, according to the Reuters survey of 11 currency analysts.

That view was likely fueled by a change of tack by the central bank, which set a series of stronger midpoints last week which helped the yuan to its best weekly gain since December 2011.  Still, traders are unsure whether the PBOC will now keep the yuan confined to its recent ranges in coming weeks or if it is ready to allow it to return to its gradual appreciation path.

The poll uses estimates of net long or short positions on a scale of minus 3 to plus 3.


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