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Sunday, January 17, 2021

Chinese Yuan Experiences Worst Decline Since 2018

The Chinese Yuan plunged as much as 1.4 percent against the US dollar on Wednesday morning as US President Donald Trump remained in contention with the Democratic nominee Joe Biden in the US presidential election.

The Chinese Yuan plunged as much as 1.4 percent against the US dollar on Wednesday morning as US President Donald Trump remained in contention with the Democratic nominee Joe Biden in the US presidential election.

The drop in the offshore Yuan, where the currency is traded more freely, represents the largest single-day percentage drop since February 2018. 

The offshore Yuan eventually pared losses, and was last down 0.7 percent, or about 6.7 Yuan per US dollar. The more tightly controlled onshore Yuan slumped 0.6 percent after falling more than 1 percent in Shanghai.

“In light of China-US tensions, the renminbi market movement hinges on the US election outcome,” chief foreign exchange strategist for Asia at Mizuho Bank Ken Cheung told Business Insider. He also pointed out that in case President Trump wins the presidential election against former Vice President Biden, that would suggest “the extension of America First agenda and protectionism policy.”

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