SHANGHAI: China’s yuan held steady against the struggling dollar on Tuesday, buoyed by encouraging domestic economic data and fresh stimulus to support consumption.
However, worries over a possible escalation of trade disputes with the United States continued to weigh on sentiment and market participants refrained from making huge bets on a stronger yuan, currency traders said.
US President Donald Trump has piled an additional 20% of tariffs on all Chinese goods and is threatening more action, including imposing reciprocal duties on US trading partners in early April.
“As long as China does not engage in strong tit-for-tat actions, the yuan seems to be relatively stable,” Maybank analysts said in a note.
As of 0351 GMT, the onshore yuan was 0.1% lower at 7.2332 per dollar, while its offshore counterpart traded at 7.2345.
Prior to the market opening, the People’s Bank of China (PBOC) set the midpoint rate, around which the yuan is allowed to trade in a 2% band, at 7.1733 per dollar, and 631 pips firmer than a Reuters’ estimate of 7.2364.
Comments
Comments are closed for this article.