Yuan to Stagnate Next Three Months as Reserves Slow, UBS Says

By Justin Carrigan

Dec. 23 (Bloomberg) -- The Chinese yuan will “stagnate” between 6.800 and 7.000 per dollar in the next three months, according to UBS AG.

“Reserve accumulation will continue in 2009 for China but at a far slower pace than in 2008,” Geoffrey Yu, a currency strategist in London at UBS, wrote in a note today. “The smaller reserve accumulation would mean reduced buying of U.S. Treasuries from China. This does not portend a start of a trend of yuan weakness.”

To contact the reporter on this story: Justin Carrigan in London at jcarrigan@bloomberg.net