Asian equities markets rallied in the wake of China’s weekend announcement that it will allow its currency to gradually move against the U.S. dollar, with some sectors seen more likely than others to benefit from the move.
China’s central bank said Saturday it would loosen the yuan’s de-facto peg to the dollar, while ruling out a one-time revaluation. Analysts expect the yuan to rise between 3% and 5% a year, against its U.S. counterpart. Read more on Chinese yuan move.
“We expect modestly positive reactions from the Chinese equity markets,” especially airline shares, as investors price for more appreciation, said strategists at Deutsche Bank.