China yuan’s long-term strengthening trend will not change – state media

China yuan’s long-term strengthening trend will not change – state media
China yuan's long-term strengthening trend will not change - state media
© Reuters. FILE PHOTO: Banknotes of Chinese yuan and U.S. dollar are seen in this illustration picture taken September 29, 2022. REUTERS/Florence Lo/Illustration

SHANGHAI (Reuters) – China’s yuan exchange rate is decided by market supply and demand, while its long-term strengthening trend will not change, a state-run media outlet said on late on Friday following a sharp jump in the local currency during the day.

The finished the domestic trading session at its strongest level since late-September, as investors cheered the government’s decision to ease some of the country’s strict COVID-19 prevention controls.

China’s sound economic fundamentals over the mid- to long-term should support a firm currency, while continued trade surplus also allows capital inflows, the Economic Daily, which is run by China’s State Council, said.

“Unlike the United States and the European Union, which had previously implemented long-term quantitative easing policies, China’s inflation is relatively low and the yuan has room for appreciation,” the newspaper said.

The currency is unpredictable as “two-way volatilities are normal and there won’t be one-sided market,” it added.

The local currency has had sharp swings in recent months. It fell to the weakest levels since global financial crisis of 2008 in light of Federal Reserve policy tightening and a slowing domestic economy, before rebounding on hopes for the relaxation of Chinese pandemic restrictions.

Despite Friday’s bounce, the yuan has still lost about 10.7% against the dollar so far this year and looks set for its biggest annual decline since 1994, when China unified market and official rates.

 

 

Leave a Reply

Your email address will not be published. Required fields are marked *

New Brokers
2.8 rating
Buy & sell Crypto in minutes
3.0 rating
Note: Investing involves risks. You can lose your deposit. We advise you to only invest in financial products which match your knowledge and experience.
2.0 rating
Interactive Brokers attracts active traders with low per-share pricing, an advanced trading platform.
4.3 rating
eToro is the world’s leading social trading platform, with thousands of options for traders and investors.
AdonFinance
Risk Warning: The material on this website is provided for informational purposes only and does not constitute an offer to sell, a solicitation to buy, or a recommendation or endorsement for any security or strategy, nor does it constitute an offer to provide investment advisory or other services by AdonFinance. In addition, the content of the website offers no opinion with respect to the suitability of any security or any specific investment. Trading foreign exchange, stocks, cryptocurrencies and commodities is potentially high risk and may not be suitable for all investors. The high level of leverage can work both for and against traders. Before any investment with any broker you need to carefully consider your targets, previous experience, and risk level. Forex trading can result in the loss of your money, as a result, you are expressly cautioned that you should never invest or trade with money that you cannot afford to lose. For the avoidance of doubt, AdonFinance's service provides Brokers reviews in the Financial market. AdonFinance, its subsidiaries, agents or affiliates will assume no responsibility whatsoever for your trading activity. © Copyright 2021 AdonFinance