The Chinese currency hit a year-to-date high against the U.S. dollar on Thursday, leaving currency experts contemplating whether officials will step in to devalue the yuan again and how this could affect the country's reserve levels.
The People's Bank of China (PBOC) has been propping up the currency since its historic devaluation last August, which sparked investors and companies to send money overseas. The central bank has been selling off its huge $3.2 trillion reserves, which bolsters the yuan by devaluing other currencies.
However, the recent strength in the Chinese currency might see a pivot from the PBOC, according to Simon Derrick, chief currency strategist at BNY Mellon. He believes that the "next surprise" from the world's second-largest economy will be fresh data showing the central bank actually added to its reserve pile in March.