The currency of the second biggest economy is believed to be gaining strength, taking into account two factors, one of which is the productive Trump- Xi meeting on the side-lines of the Buenos Aires-hosted G20.
China’s national currency has shot upwards more dramatically over the past two days than over the last decade after the country reached a truce in its trade war with the United States, and in light of a temporary decline in the dollar prices. The combination of these two factors brought the renminbi to a new level, according to Stephen Gallo, European head of currencies strategy at BMO:
“The two key events of roughly the last week have been the painkiller dose offered by [Federal Reserve chair Jay Powell] and the soothing market effects of the so-called US-China truce”, the Financial Times cited the high-profile analyst as saying.
The continental renminbi, which trades on the second biggest economy’s domestic market, has risen by 1.8 percent in price during the first two days of the week, Refinitiv data suggested. The development signals the most prominent gain since summer 2005, when China stripped its currency of domestic limitations and placed it into a more flexible, but volatile, foreign exchange domain.
