THE yuan has been stuck in a tight range since China’s financial markets re-opened after a stretch of October holidays, quelling currency volatility globally and buoying risk sentiment.

The yuan-dollar rate has fluctuated by less than a percentage point as traders await the expected release this week of the U.S. Treasury’s currency manipulation report, which may call out the Asian nation.

For Kit Juckes at Societe Generale SA, the dimmed swings in the exchange rate of the world’s two biggest economies has contributed to a calming backdrop that’s bolstering higher-risk currencies and share prices.

“U.S. dollar/yuan has traded in a 0.75 percent range, which is helping to keep a lid on global foreign exchange volatility and prevent idiosyncratic shocks from spilling over into broader-based moves,” Juckes, a global foreign exchange strategist, wrote in a note to clients Tuesday. “This is good policy but doesn’t make for exciting markets!”

At about 6.9 per dollar, the yuan has weakened back to around levels from the beginning of last year. The Federal Reserve’s broad trade-weighted dollar index, meanwhile, has rebounded to levels close to those from early 2017. And the Australian dollar, seen as a higher-risk currency that swings according to investor sentiment, has also plied a narrow range since early October.

China “will eventually let the currency slip a bit further,” Juckes wrote. “But in the very short term, what a steady dollar/yuan does is apply downward pressure on volatility despite the geopolitical bumps markets are facing, and lure investors back to higher-yielding and beaten-up currencies.” (SD-Agencies)