Chinese Exporters Snap Up Yuan in Anticipation of Further Strengthening

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Chinese exporters have been rushing to exchange U.S. dollars for yuan in anticipation of further appreciation of the Chinese currency, multiple sources from export companies told Caixin.

Since late July, depreciation pressure on the yuan against the dollar has abated as the greenback has weakened amid growing expectations of a cut in interest rates in the U.S.

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Chinese exporters are converting U.S. dollars to yuan, anticipating further yuan appreciation.
Expectations of U.S. interest rate cuts have eased depreciation pressure on the yuan since late July.
Analysts foresee yuan fluctuation, emphasizing stable policies from China's central bank and government.

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Who’s Who

Zheshang Securities Co. Ltd.: Zheshang Securities Co. Ltd. analysts suggest that a significant appreciation of the yuan is unlikely due to weak domestic demand. They predict the currency will fluctuate within a certain range in the second half of the year, influenced by uncertainties surrounding the U.S. Federal Reserve's actions and the U.S. economy.

Guotai Junan Securities Co. Ltd.: Guotai Junan Securities Co. Ltd. is a financial services company whose analysts noted in a Sunday report that the July 30 Politburo meeting unusually emphasized the need to “maintain the yuan’s exchange rate at a reasonable and balanced level,” indicating a greater focus by policymakers on stabilizing the exchange rate.

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What Happened When

Friday 2024：: People’s Bank of China reiterated its commitment to maintaining a stable exchange rate in its second-quarter monetary policy implementation report.

Sunday 2024：: Analysts from Guotai Junan Securities Co. Ltd. commented on the Politburo meeting's emphasis on stabilizing the exchange rate.

Late July 2024：: Depreciation pressure on the yuan against the dollar abated as the greenback weakened amid growing expectations of a cut in interest rates in the U.S.