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"Pioneer Investment Management Ltd. and Western Asset Management Co. are increasing bets on the yuan appreciating as analysts forecast the currency will gain at triple the rate reflected in prices of forwards contracts.

Twelve-month non-deliverable forwards weakened 0.3 percent to 6.5463 per dollar today in Hong Kong, implying the yuan will strengthen 1.6 percent from the Shanghai spot rate of 6.6554, according to data compiled by Bloomberg. That’s the smallest advance indicated since Sept. 20. The currency will appreciate 6.1 percent to 6.2700 by the end of 2011, according to the median estimate of 18 economists surveyed by Bloomberg.

The central bank will allow a 7 percent annual pace of yuan appreciation through June and raise interest rates four times as it tackles the fastest inflation in two years, Standard Chartered Plc forecast this week. China’s central bank has allowed the yuan to climb 2.6 percent since a dollar peg ended in June, raised borrowing costs in October for the first time since 2007 and last week increased banks’ reserve-ratio requirements for the fifth time this year. "

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