Chinese yuan strengthens to 6.3294 against USD Wednesday

Source: Xinhua | 2018-03-08

The central parity rate of the Chinese currency renminbi, or the yuan, strengthened 92 basis points to 6.3294 against the U.S. dollar Wednesday, according to the China Foreign Exchange Trade System.

The yuan strength came after the dollar index, which tracks the greenback against a basket of other major currencies, touched a two-week low on Tuesday.

"It appears that ongoing uncertainty over a potential trade war following President Trump's unexpected announcement last week has encouraged bears to attack the dollar once again," said Lukman Otunuga, a research analyst at FXTM, a forex broker.

In the long term, analysts believe the yuan exchange rate will maintain stable despite pressure from overseas markets before the possible rate hike by the Federal Reserve this month.

Tai Hui, Chief Market Strategist Asia with J.P. Morgan Asset Management, remains bullish on the yuan, citing optimism over the current growth momentum of China's economy.

China will deepen reforms to make interest and exchange rates more market-based, Premier Li Keqiang said Monday when delivering a government work report at the opening meeting of the annual parliamentary session.

In China's spot foreign exchange market, the yuan is allowed to rise or fall by 2 percent from the central parity rate each trading day.