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The Chinese yuan (CNY) could swing both ways and the market should be prepared for the two-way business in the exchange rate, the Chinese state-run newspaper Economic Information Daily said Monday.

Key quotes (Source: Anthony Barton, MNI news)

The market should avoid following the “herd” in chasing new highs after the recent spike [in CNY].

The yuan has appreciated by > 2% this month, and exporters’ profits will decline if they haven’t hedged against FX risks.

While the resilience and potential of the Chinese economy will provide fundamental support for exchange rate stability, the simple “buy low and sell high” principle would help prevent excessive corrections later.

The yuan is currently trading at 6.68 per US dollar, down 6.83% from the high of 7.1766 registered on May 27.