The Advancement of the Chinese Yuan Steals the Spotlight - Kakiforex | Forex markets for the smart money. The Advancement of the Chinese Yuan Steals the Spotlight The Advancement of the Chinese Yuan Steals the Spotlight

May 31, 2021

The Advancement of the Chinese Yuan Steals the Spotlight

 Since last week, the Chinese yuan has surged higher, taking it to a three -year high against the US dollar.


This has stolen the attention of Chinese policymakers to warn against speculative bets on the currency.


On Monday, a former senior official of the foreign exchange regulator, Guan Tao warned of the behavior of some parties that could harm the market and burden Chinese exporters.


Guan's comments echoed the opinion of a former central bank official, who said over the weekend that the yuan's rise would be lasting.



It also followed a warning by central bank-backed Financial News, about factors that could cause it to weaken against the greenback dollar.


Following that, the yuan returned to cut gains at the start of the Asian session after hitting a three -year high against the dollar, trading slightly lower around 6.36.


The yuan was up 1.7% in May, continuing gains from the end of March amid improving China’s economic outlook, strong capital flows and the broader weakness of the greenback dollar.


While a stronger yuan will help curb rising import prices and rising commodity costs, it could also lead to a spike in the cost of exported goods.


Investors will now take a closer look at whether the central bank will take action to curb the strength of this currency.