Strengthening of the yuan by 0.84% to USD, was observed in the past three days, was the most dramatic movement during the injection of a more flexible exchange rate since mid-year. In our opinion, is behind this combination of factors. Firstly, there is a tendency to demonstrate China's progress in front of key international meetings. Secondly, there are a number of internal reasons for tightening policy, such as tightening the requirements for reserve requirements for some banks, which was announced yesterday, coupled with strong data on the CPI, released today.
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