Chinese Yuan Soars to Highest in Three Years Against US Dollar
The Chinese yuan soared to the highest level against the US dollar in over three years, as investors around the globe search for safer assets amid the ongoing depreciation of the US dollar and China’s strengthening economic rebound.
The onshore yuan jumped another 0.2% on Tuesday to above 6.40 per dollar, rising by more than 10% over the past 12 months. However, according to analysts, China’s policymakers may intervene in the currency’s appreciation trajectory, as they attempt to stabilize the country’s export demand and subsequent surging commodity prices. “The RMB still sees the firmest appreciation pressure, and this translates to the 6.4000 being still in the spotlight,” OCBC Bank strategists explained to Reuters.
Indeed, economists suggest that a strong yuan could negatively impact the country’s exporters. According to Hong Kong’s Mizuho Bank chief Asian FX strategist Ken Cheung, “The People’s Bank of China (PBOC) is aware of the RMB appreciation risk given slowing China (economic) growth momentum in Q1 and still uneven recovery.”
Information for this briefing was found via Reuters. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
