Analysis | Strong yuan guaranteed support during Trump’s Asian tour, underlining its solidity, say analysts
Visit takes in Japan, China, South Korea, Vietnam – where he will attend the Asia Pacific Economic Cooperation summit on November 10 – and ends in the Philippines on November 13
The yuan rose to its highest level in a fortnight on Thursday on expectations the authorities would keep the Chinese currency buoyed ahead of US President Donald Trump’s visit to the country next week.
Offshore yuan touched a intraday high of 6.5861 per dollar on Thursday, its strongest level since October 17, and a fifth straight day of increases – the longest winning streak since September 4.
Ken Cheung Kin-tai, senior Asian currency strategist at Mizuho Bank, said the yuan will be guaranteed support throughout Trump’s visit, to underline its solidity during what are likely to be tough China-US trade negotiations and ward off any opportunity for the US leader to re-kiddle his pre-US election accusations of China being a “currency manipulator” by keeping its value unrealistically low.
On Wednesday, Trump called the US trade deficit with China “embarrassing” and “horrible” ahead of his Asia trip, that starts on Friday.
His tour will take in Japan, China, South Korea, Vietnam – where he will attend the Asia Pacific Economic Cooperation summit on November 10 – and ends in the Philippines on November 13.
“I won’t be surprised if the yuan continues to move higher in coming days, even if there was downward pressure on the US dollar,” said Jimmy Zhu, chief strategist at Fullerton Markets.