The Chinese yuan has recouped much of its losses against the dollar in August, sitting around 7.09 yuan to the dollar, after steadily weakening for much of the year. The gains have been aided by Chinese leader Xi Jinping’s calls for a strong currency and policymakers trying to nudge Chinese government bond rates higher.
Though that has created a floor under the currency and bond yields—for now—it isn’t clear it will hold. Investors and banks still are looking to fixed income to park their money as the property and stock market struggle.
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The measures also add to confusion about policy as the world’s second-largest economy sputters.
“They say they want to drive up bond yields but also, by the way, they are cutting rates. It is inconsistent messaging,” says Charlene Chu, a debt expert and senior analyst at Autonomous Research.
www.barrons.com/articles/china-economy-growth-bond-market-762e112f
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