Chinese yuan jumps to strongest and will likely continue
China's yuan climbed to the strongest in more than two years, and the trend is likely to continue, fueled by optimism on the country's economic recovery.
The yuan jumped 0.31 percent to 6.5623 per dollar, on the bets that the nation's rebound from the pandemic will continue. The premium that Chinese government bonds offer over American debt is near the highest on record, which attracts foreign inflows and also supports the yuan. The weaker dollar provides another boost, according to a report by Bloomberg today.
Since China is likely to continue to lead the economic recovery around the world in the coming six months, the government bonds yield advantage will remain intact and the Chinese yuan will keep rallying, according to Stephen Chiu, a strategist at Bloomberg Intelligence.