China’s yuan was more than 7 per dollar on Thursday (December 5) and was the strongest since mid-September. response to the easing of China’s COVID-19 control measures which tends to attract new foreign investment to China.
The yuan was also boosted by expectations that the US Federal Reserve (Fed) will slow the increase in the interest rate. That sent the dollar index down to its lowest level in nearly five months.
Reuters reports that the domestic yuan jumped about 1.4 percent to as high as 6.9507 early on Monday (December 5), its strongest since September China’s central bank yuan
In overseas markets, the yuan appreciated 1.1 percent to a two-month high of 6.9438 after hitting a weekly record high.
Last week the yuan rose about 1.6 percent, its biggest weekly gain since 2005, on expectations that China would continue to ease its COVID-19 containment measures.
China’s CSI300 Index rises nearly 10% in November Net capital inflows in China exceeded 60 billion yuan ($8.55 billion) through the Stock Connect program.
Maybank said that The appreciation of the yuan is also a result of the depreciation of the dollar. The dollar index is down almost 9% from the high experienced on 28 September.
However, some analysts warned that China’s economic recovery prospects are uncertain. and the yuan will continue to fluctuate
Maybank said in a report to customers that a tendency to return to tight control of COVID policies or a worsening contagion situation may be an opportunity for investors to sell the yuan again.
