SHANGHAI: China’s yuan held steady against the US dollar on Tuesday even as markets grappled with the Trump administration’s back-and forth changes in tariffs.
Since President Donald Trump announced reciprocal tariffs on April 2, sparking tit-for-tat duties on each other’s goods, trade relations between the world’s two largest economies have become the primary factor affecting the yuan.
The spot yuan opened at 7.3050 per dollar and was last trading at 7.3086 as of 0306 GMT, 4 pips firmer than the previous late session close and 1.37% weaker than the midpoint.
“The recent US tariff hikes have put depreciation pressure on the yuan. However, the dollar has also weakened against other major currencies, contrary to what most have expected before,” said UBS economists led by Tao Wang in a note. Prior to the market opening, the People’s Bank of China set the midpoint rate, around which the yuan is allowed to trade in a 2% band, at 7.2096 per dollar, the second weakest level since September 2023.
But it was still around 1000 pips firmer than a Reuters’ estimate of 7.3094.
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