SHANGHAI: China’s yuan managed to steady at a 3-1/2-month low against the dollar on Tuesday, as signs of tighter cash conditions offshore and a firmer-than-expected official guidance helped prevent further selling of the Chinese currency.
The yuan has been put to the sword recently by Donald Trump’s return to the White House, as investors worried about higher tariffs on Chinese goods and hostile trade relations between the two economic giants in the next four years.
During Trump’s first presidency, the yuan weakened about 5% against the dollar in the initial round of US tariffs on Chinese goods in 2018, and fell another 1.5% a year later when trade tensions escalated. The midpoint rate, around which the yuan is allowed to trade in a 2% band, was fixed at 7.1911 per dollar, 394 pips firmer than a Reuters’ estimate of 7.2305.
As of 0300 GMT, the onshore yuan was 0.06% lower at 7.2357 to the dollar, not far from a 3-1/2-month trough of 7.2476 hit on Thursday.
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