Yuan Snaps Losing Streak as Dollar Loses Ground

00:00

00:00/00:00

Listen to this article 1x

Depreciation pressure on the yuan against the U.S. dollar is showing signs of abating as the greenback weakened amid growing expectations of a cut in interest rates, and the People’s Bank of China (PBOC) continued its support of the exchange rate.

The yuan rose sharply against the dollar on Thursday, with the onshore currency strengthening by more than 500 pips, the biggest increase in eight months. The official spot closing rate jumped to 7.2203, the strongest reading in more than two months. The rate closed at 7.2536 on Friday, with the offshore yuan trading at around 7.26 to the dollar.

You've accessed an article available only to subscribers

Subscribe today for just $.99.

VIEW OPTIONS

Download our app to receive breaking news alerts and read the news on the go.

Get our weekly free Must-Read newsletter.

Share this article

Open WeChat and scan the QR code

DIGEST HUB

Digest Hub

Back

Explore the story in 30 seconds

The yuan strengthened significantly against the U.S. dollar as the greenback weakened amid expectations of a U.S. interest rate cut and support from the People’s Bank of China.
The onshore yuan saw the largest increase in eight months, closing at 7.2203 per dollar on Thursday and 7.2536 on Friday; the offshore yuan traded around 7.26.
Analysts noted that PBOC's measures and growing expectations of U.S. interest rate cuts are easing pressure on the yuan, potentially leading to further appreciation by the end of 2024.

AI generated, for reference only

Who’s Who

Ping An Securities Co. Ltd.: Ping An Securities Co. Ltd. is referenced in the article with comments from its chief economist, Zhong Zhengsheng. He noted that growing expectations for the U.S. Federal Reserve to start lowering interest rates in September have driven U.S. Treasury yields and the U.S. Dollar Index lower, thereby easing depreciation pressure on the yuan.

Zheshang Securities Co. Ltd.: Zheshang Securities Co. Ltd. is mentioned in the article for its analysts' report, which credits the People's Bank of China's (PBOC) support for the yuan's appreciation against the U.S. dollar. The central bank emphasized the need to "improve the flexibility of the exchange rate" during a July 19 meeting, suggesting stronger support for the currency.

AI generated, for reference only

What Happened When

July 19, 2024：: The People's Bank of China (PBOC) discussed the need to 'improve the flexibility of the exchange rate' at a meeting, indicating stronger support for the yuan.

Thursday, July 25, 2024：: The yuan rose sharply against the dollar with the onshore currency strengthening by more than 500 pips, closing at 7.2203.