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China’s yuan firmed past the closely watched 7-per-dollar level on Monday, hitting its strongest since mid-September, as Beijing eased some of its strict COVID-19 curbs, potentially attracting fresh foreign inflows.
The Chinese currency was also bolstered by expectations of slower U.S. interest rate hikes, which knocked the dollar index to near five-month lows.
But some warn that China’s road for economic recovery could be bumpy and that the yuan will remain volatile.
Potential “policy U-turns or worsening of the infections could be seen as opportunities to short” the currency, Maybank said in a note to clients.
The onshore yuan jumped roughly 1.4 percent to as high as 6.9507 on Monday morning, its strongest since Sept.
