China’s Yuan Hits 14-Month High on Trade Surplus, Weaker Dollar
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The onshore yuan closed at a fresh 14-month high against the dollar Tuesday, supported by a weakening greenback, China’s trade surplus, and rising foreign demand for yuan assets.
The currency finished the domestic session at 7.0425 per dollar, up about 0.9% since November. The offshore yuan briefly strengthened past 7.04, touching around 7.035.
The move comes as pressure on the dollar has intensified. The U.S. Dollar Index has fallen more than 1% over the past month amid the Federal Reserve’s rate-cutting cycle, while markets remain cautious about the U.S. fiscal outlook and long-term inflation risks.
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- The onshore yuan closed at a 14-month high of 7.0425 per dollar, up 0.9% since November, supported by a weakening dollar and China’s record $1 trillion trade surplus.
- The U.S. Dollar Index fell over 1% in the past month amid Fed rate cuts and fiscal/inflation concerns.
- Foreign holdings of yuan assets reached 10.42 trillion yuan ($1.5 trillion), the highest in nearly four years.
- Standard Chartered
- The article mentions that overseas holdings of yuan assets reached 10.42 trillion yuan ($1.5 trillion) by the end of the third quarter, a nearly four-year high, according to data from Standard Chartered.
- Yuekai Securities
- Yuekai Securities is a company that employs Luo Zhiheng as its chief economist. Luo Zhiheng believes that robust exports, reduced trade tensions, and increased demand for yuan assets will likely bolster the currency's resilience in the coming year.
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