Yuan Surpasses Key Dollar Level
The yuan-dollar rate dropped to 6.9929, reaching the Chinese currency’s most robust level in over three years. This followed a decline in the US Dollar Index, which was influenced by discussions concerning Greenland.
US President Donald Trump’s threats of tariffs on roughly eight European nations—related to their adherence to his annexation of Greenland—weighed on the dollar, prompting a wider drop in the US Dollar Index.
Previously, the yuan had been on a depreciating path against the dollar since March 2022. This downward trend intensified after the US Federal Reserve implemented tighter monetary policy through interest rate increases in the aftermath of the COVID-19 pandemic.
As the Federal Reserve raised rates, the yuan-dollar exchange rate exceeded the 7-per-dollar threshold in September 2022. In that same month, the Chinese currency slid to its weakest point since the 2008 global financial crisis.
The recent decline below the 7-per-dollar level represents a significant turnaround after years of downward pressure on the yuan, driven by worldwide monetary tightening and evolving trade dynamics.
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