The Yuan is at the Highest Level of the Last 2 Years

The Yuan is at the Highest Level of the Last 2 Years The yuan is trading at its highest level of the last 2 years against the dollar. The Yuan reached its strongest level since 2018, with optimism that China, one of the economies most affected by the coronavirus epidemic, will recover rapidly. The yuan reached the highest level in more than two years against the dollar, driven by optimism about China's rapid economic recovery and the impact of the interest premium relative to the rest of the world. The offshore yuan gained 0.31 percent against the dollar, reaching a level of 6.5623, surpassing its peak this month after Democrat Joe Biden was elected president of the United States. The RSI indicator of the yuan, which has been rising for 4 days in a row, showed that the overrun zone has entered. In addition to the improvement in relations between Washington and Beijing, another reason for the rise in the yuan is the expectations that China will quickly recover from the effects of the epidemic. The near-record interest rate difference between Chinese Treasury bonds and US bonds also supports foreign inflow and the yuan. However, the general weakness of the dollar is very effective in reviving the yuan. Commenting on the issue, Bloomberg Intelligence strategist Stephen Chiu said, "China will probably lead the macroeconomic recovery around the world for the next six months. Therefore, the interest rate advantage will remain valid and the yuan will continue to rally." The yuan headed for monthly earnings for the sixth consecutive year in November. This situation will be recorded as the longest rising series recorded since 2014. The yuan has gained 9 percent since the end of May, wiping out more losses from tensions between China and the US. The dispute between the two economic giants over issues such as trade and intellectual property caused the yuan to hit the lowest in a decade. The recent rally creates a space for policy makers to reform the foreign exchange market. Moving towards easing capital constraints, the Beijing administration also relaxed controls on yuan fixing in October. The yuan, traded in China, dropped its rise to 65652, up 0.27 percent. The Bloomberg Dollar Spot Index has not changed much after losing two consecutive sessions, and is close to its lowest burned since 2018.