Yuan Gains on Strong Stock Market Performance
Yicai Global
DATE:  Feb 25 2019
/ SOURCE:  yicai

(Yicai Global) Feb. 25 -- The Chinese currency grew stronger against the dollar today as recent strong showing on the mainland stock markets made yuan-based assets more alluring.

The onshore spot rate was at 6.6941 when the market closed at 4.30 p.m., up 245 basis points or 0.36 percent higher than Feb. 22, while the offshore spot rate appreciated 0.23 percent to reach 6.6891. A lower rate means a stronger yuan.

China's three main stock benchmarks gained more than 5 percent today as trading volume soared to CNY1.04 trillion (USD155 billion),  the highest turnover since November 2015. The three indexes have  risen  14.3 - 20.9 percent since Feb. 11, the first trading day after the end of  the week-long Chinese New Year holiday.

The yuan got off to a powerful start this morning after news of promising trade talks between Washington and Beijing sent the redback soaring, though its gains were trimmed this afternoon.

United States President Donald Trump tweeted yesterday that he "will be delaying" scheduled plans to increase tariffs on Chinese imports from March 1 due to "very productive talks" between the world's two largest economies. China supported the sentiment, with its delegation announcing the same day that it had made "substantial progress" following high-level economic and trade talks in Washington.

Today's gains extend continued success of the yuan over the past three months, since Chinese President Xi Jinping and Trump agreed to a 90-day truce at the G20 summit in Buenos Aires late November.

Washington was set to hike its 10 percent tariff on USD250 billion worth of Chinese imports to 25 percent in the New Year, but agreed to hold off until at least March 1 if Beijing would engage in discussions about intellectual property theft and forced technology transfers in China.
 

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Keywords:   CNY Rate,CNH Rate,Foreign Exchange Market