China’s yuan surges to 17-month high on Joe Biden US presidential election hopes as Donald Trump loses ground
- The offshore yuan extended its rally to 6.7136 per US dollar on Tuesday in thin market flow conditions after US President Donald Trump lost ground in new polls
- The onshore yuan foreign exchange market remains closed for the ‘golden week’ national holiday, with trading set to resume on Friday
China’s yuan trading outside the mainland surged to its highest level in 17 months on Tuesday after new polls showed challenger Joe Biden had increased his lead over US President Donald Trump in the race for the White House that is less than a month away.
On Tuesday, the offshore yuan extended its rally to 6.7136 per US dollar in thin market flow conditions, rising in tandem with improving sentiment in global financial markets, with the Australian dollar and the Singapore dollar also gaining for a second consecutive day.
This is positive for the yuan because Biden is not supportive of tariffs and trade policy to handle China’s issues
New election polls show support for incumbent Trump is sliding after his aggressive performance at last week’s first debate and since he tested positive for the coronavirus.
“The market thinks Biden has a better chance of winning and a rising advantage of the Democrats [to take control] in the Senate,” said Ken Cheung Kin-tai, chief Asian currency strategist within the East Asia treasury department at Mizuho Bank. “This is positive for the yuan because Biden is not supportive of tariffs and trade policy to handle China’s issues.”
An NBC News/Wall Street Journal national poll conducted after the first debate had Biden on 53 per cent and Trump on 39 per cent – a gap six points wider than in their previous poll two weeks earlier.
Biden has previously criticised Trump’s trade policy against China as damaging the agriculture and manufacturing sectors in the United States, and has called for the dropping of unilateral tariffs.