SHANGHAI: China’s yuan advanced further on Tuesday after enjoying two consecutive months of gains, briefly renewing an eight-month high against a dollar dragged down by worries over US President Donald Trump’s spending bill.
Signs of easing trade tensions between the world’s two largest economies underpinned the Chinese yuan over the past two months.
Traders expect authorities to remain focussed on maintaining currency stability, noting that wide yield differentials with the United States and persistent domestic deflationary pressures do not justify a significantly stronger yuan. The yuan’s uptick on the day reflected broader dollar weakness as US Senate Republicans tried to pass Trump’s sweeping tax-cut and spending bill, despite divisions within the party about its expected $3.3 trillion hit to the nation’s debt pile.
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