RMB surges to 16-month high against USD

China’s yuan surged in late trade, strengthening beyond the 6.5 per dollar level for the first time in 16 months. The Chinese currency traded in Shanghai rose as much as 0.55% to 6.4908 per dollar. It pared gains to trade at 6.4921 as of 6:17 p.m. local time. The offshore yuan advanced 0.68% before trading up 0.64% at 6.4989. China’s exchange rates at home and overseas have registered Asia-beating gains of more than 3% in the past month amid speculation policy makers will buoy the currency in the run-up to a key Communist Party meeting on Oct. 18. That premise of government support is also positioning the yuan as a recipient of haven flows from investors rattled by escalating tensions between the U.S. and North Korea. However, according to Bloomberg, some experts warned of possible intervention from the PBOC to slow the rise, as it threatens to hurt China’s exports.