And that is despite a surging recovery in the currency over the past two months, with USD/CNY having 7.30 at the peak in late October to early Novembe
And that is despite a surging recovery in the currency over the past two months, with USD/CNY having 7.30 at the peak in late October to early November. The over 8% decline will be the worst performance by the Chinese onshore yuan against the dollar since 1994 when China unified market and official rates.
I’ve argued plenty of times during the course of the year that if China is allowing its currency to weaken, that is a major tailwind signal for the dollar to extend higher – as we saw during the August period here.
As such, this will continue to be a key consideration for the greenback going into next year as the Fed tightening cycle will be called into question and as China has moved away from its zero-Covid policy.
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