The Asian markets opened positively against the US dollar on Tuesday with the Chinese Yuan being the most notable mover. The Chinese Yuan climbed 0.3% against the US dollar and topped the Asian currency markets list. Even the Indian Rupee experienced a facelift after being trampled by the USD this week.
So why is the Chinese Yuan performing better against the US dollar? In this article, we will highlight the recent changes in developments in the global currency markets.
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Currency: Why Is The Chinese Yuan Rising & The US Dollar Dipping?
Sources in the currency market told Reuters that China’s major state-owned banks dumped US dollars for the Chinese Yuan in the onshore markets on Monday. Therefore, Chinese banks massively sold US dollars and purchased the Yuan to keep the currency on top of the ladder.
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“The support to the renminbi (Yuan) has helped to limit Friday’s advance of the dollar, as has some quite aggressive verbal intervention in support of the yen from Japanese officials,” said Chris Turner, global head of markets at ING.
In addition, the Indian Rupee fell to an all-time low of 83.59 on Friday but recovered to 83.46 on Monday’s opening bell. The Japanese Yen also saw a brief recovery against the US dollar as the Asian markets attracted positive sentiments.
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However, the Chinese Yuan topped all Asian currencies and climbed above the US dollar in the day’s trade. Read here to know why the Japanese Yen is weakening in the global currency markets in 2024.
Moreover, despite the dip, the US dollar could have a comeback as currency investors accumulate the USD at every dip in 2024. The move is cementing the dollar’s prospects giving it strength at all resistance levels. The development solidifies the USD making it have a better comeback against the Chinese Yuan and other local currencies.