The yuan edged up on Tuesday, extending a month-long holding pattern that has left traders scratching their heads about the near-term direction of the exchange rate. Spot yuan closed at 6.3049 per dollar on Tuesday, 72 pips stronger than Monday's close. The dollar/yuan rate has churned within a narrow band of 6.30-6.32 since late December, and market participants are split over what will happen next.
While appreciation expectations have recently picked up in the NDF market, onshore traders are agnostic about near-term appreciation. They do not rule out appreciation in the lead-up to Chinese Vice President Xi Jinping's visit to the United States on February 14, but most prefer not to hazard a prediction.