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China’s state media says don’t bet on further declines for the yuan

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An opinion article in China’s Economic Daily says that the yuan is “likely to maintain a two-way fluctuation”

  • And warns that  “market participants should not bet on a prolonged one-way decline” 

The piece goes on saying supportive policy will be maintained, with an appropriate monetary environment

  • economic recovery is unbalanced
  • the global pandemic outlook remains uncertain
  • domestic inflation is moderate and controllable

And

  • yuan-denominated assets such as stocks and bonds continue to attract foreign investment
  • have large growth potential

On the USD:

  • appreciation may also be constrained, helping keep China-US rate spread stable, as the Federal Reserve will slow its policy normalization to prevent bursting asset bubbles

USD/CNH daily:

yuan chart



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