Currency traders aren't the only ones with their eyes on China's exchange-rate policy. Oil traders are also tuned in, to the extent prices could jump higher if a revaluation of the yuan is announced.
But the knee-jerk assumption -- that an appreciating currency could sharpen China's already keen appetite for oil -- would likely be wrong, analysts say.
Revaluation would increase China's buying power when it comes to imports of dollar-denominated commodities. But demand for oil is relatively price inelastic, and a stronger yuan could slow growth in China's economy and prompt the government to cut oil subsidies.
The net result likely will be little if any impact on China's rapidly growing demand for petroleum products, said Greg Priddy, a Washington-based China analyst.
In other commodity markets:
CRUDE OIL: Futures on the New York Mercantile Exchange rose 2%, topping $52 a barrel for the first time in nearly two weeks, following remarks from members of the Organization of Petroleum Exporting Countries about limited spare production capacity. Most-active June crude rose $1.07 to $52.03.
SILVER: Futures on the Comex division of the Nymex rose, supported by commodity fund and local traders on the floor buying in the wake of the latest Commodity Futures Trading Commission's Commitment of Traders report, which indicated large speculators are holding their lowest net long positions since October 2003. A long is a bet prices will rise. July silver rose 11.5 cents to $7.080 an ounce.