Donald Trump’s "warning shot" to China and Russia this week on gaming their currencies is more of a damp squib -- at least as far as the world’s second-largest economy is concerned.
The yuan has been heading up against the dollar, not down, and looks set to at least stabilize this year. The onshore yuan (CNY) rose 3.7 percent through April 16, while the offshore yuan (CNH) climbed almost 4 percent, marking its best-ever gains in the first quarter. Extrapolate those increases for the year and pretty soon you’re looking at a whopping 14 percent annual rally.
Analysts who in the first quarter were calling for the yuan to depreciate have gradually shifted course. Many now expect the currency to remain strong, though they don’t see it appreciating at anything close to its torrid pace so far. Goldman Sachs revised its forecast in late March, saying the Chinese currency to reach 6.30, 6.25 and 6.20 to the dollar in three, six and 12 months, compared with its prior estimate of 6.35, 6.40 and 6.45...