Beijing has been keeping a super-tight leash on the yuan in the run-up to its Communist Party Congress, and will keep doing so despite giving Group of Seven nations extra fodder to complain about its currency regime.
The yuan has barely budged against the U.S. dollar since China markets reopened from a week-long holiday.
That's despite a pickup in complaints, especially from European quarters, about the snail's pace with which Beijing has been letting the yuan rise.
On the over-the-counter market, the dollar ended at CNY7.5115 Wednesday, not far from its pre-holiday close on Sept. 28 of CNY7.5061.
Expect this to become the topic de jour at the G7 talks next week.
There's a lack of consensus among European politicians about the causes (and impact) of a stronger euro, and a very clear lack of inclination on the part of the U.S. or Japan to do anything about it in terms of their own currencies.
When in doubt, blame China. Easiest way to score some political points at home. But Beijing won't care about all the rhetoric that comes from the G7. That is background noise.
The real focus for officials is the Communist Party Congress. It is held once every five years and is a sensitive time. The Congress determines changes in top party posts and Beijing will want to tout to party members its focus on income distribution and improving conditions for the rural sector.
Not a time to be messing around with the currency, or China's booming stock market. Also, there have been signs that while Beijing will continue to let the yuan tick higher, it is relying more on interest rate and reserve requirement ratio hikes to slow the economy and limit asset bubbles.
Data coming out in the next week or so will likely point to the need for further tightening, but don't expect China to respond with anything exciting on the currency front.
A Dow Jones Newswires poll forecasts a September trade surplus of US$21.2 billion, narrower than the surplus of $25.0 billion in August, but wider than $15.3 billion in September last year.
Year-on-year export growth likely sped up to 24.0% from 22.7% in August, while import growth likely quickened to 21.3% from 20.1%. As well, M2 money supply is expected to have grown 18.1% from a year earlier, in line with the 18.09% gain posted at the end of August.
The economy is still powering ahead, flush with liquidity, despite a slew of rate hikes and other tightening measures taken this year.
But there is very unlikely to be major policy changes coming from China in the next few weeks, regardless of what the data show. Beijing will want to wait until the Congress is well past and it has got the headlines it wants from the gathering.
Any G7 muttering about the yuan, in turn, will likely elicit a polite response but not much else.
The yuan has barely budged against the U.S. dollar since China markets reopened from a week-long holiday.
That's despite a pickup in complaints, especially from European quarters, about the snail's pace with which Beijing has been letting the yuan rise.
On the over-the-counter market, the dollar ended at CNY7.5115 Wednesday, not far from its pre-holiday close on Sept. 28 of CNY7.5061.
Expect this to become the topic de jour at the G7 talks next week.
There's a lack of consensus among European politicians about the causes (and impact) of a stronger euro, and a very clear lack of inclination on the part of the U.S. or Japan to do anything about it in terms of their own currencies.
When in doubt, blame China. Easiest way to score some political points at home. But Beijing won't care about all the rhetoric that comes from the G7. That is background noise.
The real focus for officials is the Communist Party Congress. It is held once every five years and is a sensitive time. The Congress determines changes in top party posts and Beijing will want to tout to party members its focus on income distribution and improving conditions for the rural sector.
Not a time to be messing around with the currency, or China's booming stock market. Also, there have been signs that while Beijing will continue to let the yuan tick higher, it is relying more on interest rate and reserve requirement ratio hikes to slow the economy and limit asset bubbles.
Data coming out in the next week or so will likely point to the need for further tightening, but don't expect China to respond with anything exciting on the currency front.
A Dow Jones Newswires poll forecasts a September trade surplus of US$21.2 billion, narrower than the surplus of $25.0 billion in August, but wider than $15.3 billion in September last year.
Year-on-year export growth likely sped up to 24.0% from 22.7% in August, while import growth likely quickened to 21.3% from 20.1%. As well, M2 money supply is expected to have grown 18.1% from a year earlier, in line with the 18.09% gain posted at the end of August.
The economy is still powering ahead, flush with liquidity, despite a slew of rate hikes and other tightening measures taken this year.
But there is very unlikely to be major policy changes coming from China in the next few weeks, regardless of what the data show. Beijing will want to wait until the Congress is well past and it has got the headlines it wants from the gathering.
Any G7 muttering about the yuan, in turn, will likely elicit a polite response but not much else.
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