In Depth: What’s Next for the Yuan After Crushing the Dollar for Six Months

Notwithstanding growing tensions between Washington and Beijing and the Covid-19 pandemic, now is a good time for Chinese mainland tourists to hop on a plane to the U.S. –– the appreciation of the yuan over the past six months means they are getting far more bang for their buck.

At the end of May, they needed to exchange 7,146 yuan to get $1,000, but on Monday they would only have had to part with 6,537 yuan, a saving of 609 yuan, or 8.5%, according to the central bank’s official closing price. The yuan has been the second-best performer against the U.S. dollar among Asian currencies since it hit a closing low of 7.16 yuan on May 28, beaten only by the South Korean won.

The Chinese currency’s rapid appreciation over the past six months to its strongest level against the dollar in nearly two and a half years has raised concerns among some analysts that it has strengthened too quickly and could have an adverse impact on exports — in an analysis of November’s official manufacturing Purchasing Managers Index, the National Bureau of Statistics noted (link in Chinese) that 18.8% of export companies said they were affected by fluctuations in the exchange rate, up from 17.1% in October, and some survey respondents said appreciation had put corporate profits under pressure and led to a decline in export orders.