By South China Morning Post | Created at 2025-01-21 04:51:34 | Updated at 2025-01-21 09:51:44
5 hours ago
The Chinese yuan surged on Monday night after US President Donald Trump struck a softer-than-expected tone on China during his inaugural address, with analysts forecasting the currency would remain “largely stable” in the near future.
The offshore yuan climbed steadily, rising from above 7.31 to below 7.27 against the US dollar. At midday on Tuesday, the offshore yuan was trading at around 7.269 per US dollar.
On Tuesday, the People’s Bank of China set the midpoint rate – also known as the fixing rate – at 7.1703 per US dollar, the strongest level since early November.
Zhang Zhiwei, president and chief economist at Pinpoint Asset Management, attributed the yuan’s strengthening primarily to Trump’s failure to mention tariff policies against China in his inauguration speech.
“The concern in the market about trade war is pushed off, but it hasn’t disappeared. People are still waiting for more signals coming from the US government on tariff negotiation,” he said.
Looking ahead, Zhang expects the yuan to remain “largely stable”, with slight fluctuations largely driven by movements in the US dollar.
The yuan has remained under pressure in recent weeks as the safe-haven US dollar has strengthened amid expectations that the US Federal Reserve will slow the pace of rate cuts this year.
