Chinese yuan rally abates

Tuesday’s rally of yuan was mainly the result of an across-the-board drop of the US dollar against other currencies, after US president-elect Donald Trump said in an interview with the Wall Street Journal that the dollar was “too strong” to compete with its trading counterpart China.

Trump’s remarks also dragged down the US dollar index by 0.9 per cent to 100.28, the weakest level seen since early December.

Although dealers showed little appetite for short yuan positions overnight, it remains to be seen whether the yuan will hold up at the levels seen in early January.

“I think longer term bullish US dollar bias will re-emerge, but it is very much predicated on US fiscal spending and US tax reform,” said Stephen Innes, senior trader at Oanda.

South China Morning Post

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Stephen Innes

Stephen Innes

Senior Currency Trader and Analyst at OANDA
Stephen has over 25 years of experience in the financial markets and specializes in Asian currencies at OANDA. After having started his trading career with NatWest Bank, he is currently based in Singapore as a Senior Currency Trader and Analyst with OANDA, focusing on the movement of the Aussie Dollar and ASEAN Currencies. Stephen has an extensive trading experience in Interest Rate Futures, Money Markets and Precious Metals. Prior to joining OANDA, he worked with organizations like Cambridge Mercantile, Nat West, Garvin Guy Butler, Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes