Briefing: Yuan Strengthens on Weaker Dollar, China Stimulus

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The yuan has benefited from the recent weakness of the U.S. dollar and China’s announcement of a new economic stimulus package. Photo: The Paper

A run-down of key China developments over the past 24 hours:

Yuan appreciation: The offshore yuan strengthened past the 7 mark (link in Chinese) against the U.S. dollar for the first time since May 2023 on Wednesday. The dollar has broadly weakened as expectations have grown for the Federal Reserve to make another 0.5-percentage-point interest rate cut in November due to a decline in consumer confidence. China’s new stimulus package aimed at boosting the economy also lent strength to the yuan.

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The offshore yuan strengthened past 7 against the U.S. dollar, supported by expectations of a Federal Reserve rate cut and China's new economic stimulus measures.
Chinese shares in the U.S. surged, with the Nasdaq Golden Dragon China Index up over 9% due to China's announced economic measures.
China paid out nearly 11 billion yuan in vehicle trade-in subsidies and borrowed 150 billion yuan to stimulate domestic consumption.

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Who’s Who

Nasdaq Golden Dragon China Index: The Nasdaq Golden Dragon China Index surged over 9% on Tuesday, its largest gain since 2022, following China's announcement of a series of measures aimed at revitalizing its sluggish economic recovery.

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What Happened When

2023：: China's outbound direct investment (ODI) rose 8.7% to $177.3 billion, with more funds flowing to Southeast Asia and Africa, and fewer to Australia, the EU, and the United States.

Tuesday, September 24, 2024：: Shares of U.S.-listed Chinese companies jumped after China announced a slate of measures to energize its sluggish economic recovery. The Nasdaq Golden Dragon China Index soared more than 9%, its largest gain since 2022.