Now Reading: Yuan nears three-and-a-half-year high as Fed hike bets fade
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Yuan nears three-and-a-half-year high as Fed hike bets fade
China’s yuan traded near a three-and-a-half-year high against the US dollar on Friday and headed for a seventh straight weekly gain. The spot yuan rose 0.01% to 6.7443 per dollar by 0258…
The Story in Brief
China’s yuan traded near a three-and-a-half-year high against the US dollar on Friday and headed for a seventh straight weekly gain. The spot yuan rose 0.01% to 6.7443 per dollar by 0258 GMT, after reaching 6.74 in the previous session, its strongest level since February 2023.
The People’s Bank of China set its daily midpoint at 6.7878, the strongest since February 2023. Softer US producer prices in July reduced expectations of a September Federal Reserve rate hike, weighing on the dollar. The yuan has gained 3.7% against the dollar this year. The PBOC also injected 349 billion yuan into the banking system through overnight reverse repos.
The Indian Opinion
The easy story is that China’s currency is surging because its economy has suddenly strengthened. The report points elsewhere: softer Chinese growth, official guidance through the daily fixing and reduced US rate-hike expectations are doing much of the work. That makes the rally vulnerable if American jobs or inflation data rebound, or if the PBOC changes its stance. The next test is whether the yuan can hold below 6.75 per dollar without stronger growth data.
Source: thehindubusinessline.com
This story was synthesised by AI from the source linked above.
