Breaking News
Investing Pro 0
New Year’s SALE: Up to 40% OFF InvestingPro+ CLAIM OFFER

Yuan jumps past 7 per dollar as China eases some COVID curbs

Economy Dec 04, 2022 11:21PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. Coins and banknotes of China's yuan are seen in this illustration picture taken February 24, 2022. REUTERS/Florence Lo/Illustration
 
GS
+1.10%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
USD/CNY
-0.52%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
MS
-0.29%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
DX
+0.11%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

SHANGHAI (Reuters) - China's yuan firmed past the closely watched 7-per-dollar level on Monday, hitting its strongest since mid-September, as Beijing eased some of its strict COVID-19 curbs, potentially attracting fresh foreign inflows.

The Chinese currency was also bolstered by expectations of slower U.S. interest rate hikes, which knocked the dollar index to near five-month lows.

But some warn that China's road for economic recovery could be bumpy and that the yuan will remain volatile.

Potential "policy U-turns or worsening of the infections could be seen as opportunities to short" the currency, Maybank said in a note to clients.

The onshore yuan jumped roughly 1.4% to as high as 6.9507 on Monday morning, its strongest since Sept. 13, tracking the central bank's firmer midpoint guidance.

Last week, the yuan jumped about 1.6%, its biggest weekly gain since 2005 amid expectations authorities will continue to loosen strict COVID curbs.

In the offshore market, the yuan gained 1.1% to a two-month high of 6.9438, after posting record weekly gains.

More cities, including financial hub Shanghai and Urumqi in the far west, announced an easing of curbs over the weekend as China tries to make its zero-COVID policy more targeted and less onerous after unprecedented protests against restrictions.

China's benchmark CSI300 index jumped nearly 10% in November, as mainland stocks witnessed monthly net inflows exceeding 60 billion yuan ($8.55 billion) via the cross-border Stock Connect scheme.

Morgan Stanley (NYSE:MS) on Sunday upgraded China's equities to overweight, citing "multiple positive developments alongside a clear path set towards reopening."

The Wall Street bank joined a slew of global institutions, including UBS and Goldman Sachs (NYSE:GS), in turning bullish toward China on expectations of an eventual reopening of the economy.

Standard Charted expects China's real urban household consumption growth to accelerate to 7% in 2023, from 0.2% in 2022, forecasting China will remove most COVID restrictions by the second quarter of 2023.

Maybank also attributed the yuan's strength to "the broader depreciation in the greenback." The dollar index has slumped nearly 9% from its Sept. 28 peak.

($1 = 7.0190 Chinese yuan)

Yuan jumps past 7 per dollar as China eases some COVID curbs
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email