Chinese FX Reserves Inch Higher in March
Marketwatch: China’s forex reserves rise for 2nd straight month
The reserves ended March at $3.009 trillion, up $3.96 billion from a month earlier and following a gain of $6.92 billion in February, the People’s Bank of China reported Friday. Economists polled by The Wall Street Journal had expected a $10 billion rise in March.
The recovery suggests that after 16 months of selling foreign exchange to prop up the yuan, the central bank largely halted its intervention in March, said Julian Evans-Pritchard of Capital Economics–though it could feel pressure to resume if the dollar strengthens again, setting off yuan bearishness and spurring capital outflows.
This bounces was also seen in 2016. I am still of the opinion that the yuan is in the eye of a hurricane because I expect further U.S. dollar appreciation. The yuan has tracked with the euro for two years after the August 2015 devaluation.