Yuan's Rally Versus Peers Suggests China's Defense Can Backfire [Yahoo! Finance Canada]
Royal Bank Of Canada (RY)
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Source: Yahoo! Finance Canada
would hinder its push to reinvigorate the economy — exporters' weakened competitiveness. Most Read from Bloomberg In a potential pitfall for exporters, the yuan has surged to the strongest level since October 2022 versus a basket of trading partners' exchange rates, including the won and euro, according to a Bloomberg tracker of the CFETS Index. The outperformance came as the People's Bank of China put a floor under the onshore yuan at 7.3 per dollar since December amid a rebound in the greenback. China's active currency defense bodes well for the nation's assets and beleaguered currencies in Asia, but more challenges for exporters — already facing US President-elect Donald Trump's tariff-hike threats — could lead to tepid earnings that may stymie a meaningful recovery. Adopting a rigid FX strategy by drawing a red line is also controversial, as artificial stability in the market may lead to outbursts of volatility in the future. “One of the ways monetary policy easing works i
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