Around 8 p.m., the “onshore” yuan, traded in mainland China, gained 0.34% against the euro, to 7.6309 yuan per euro.
The yuan strengthened on Tuesday, supported by Beijing’s announcement of monetary easing in 2025, almost a week after reaching its lowest level against the dollar.
Around 7:00 p.m. GMT, the “onshore” yuan, traded in mainland China, gained 0.34% against the euro, to 7.6309 yuan per euro.
It gained 0.07% against the greenback, to 7.2498 yuan per dollar.
Chinese leaders announced on Monday that they wanted to “relax” their monetary policy next year and promised a “more proactive budgetary policy” to “stabilize” real estate and financial markets.
“This helped to offset fears about economic growth” in China, which has been facing a slowdown for several months and threatened by the economic war with the United States promised by Donald Trump for his second term, explains Lee Hardman, analyst at MUFG.
As China’s much-anticipated Central Economic Work Conference (CEWC) approaches, “market watchers are paying close attention to the scale of stimulus measures” planned for next year, says analyst Stephen Innes of SPI Asset Management.
“However, monetary policy is not really the problem in China and interest rates are low anyway,” adds Kathleen Brooks, analyst at XTB.
Investors are waiting for “fiscal measures to support consumption” to revive the country’s internal demand, explains Mr. Innes.
The market is wondering “how much the Central Bank of China (PBoC) will allow the yuan to strengthen. Particularly with potential future customs duties,” Christopher Vecchio of Tastylive commented to AFP on Monday.
Furthermore, the British pound reached its highest level against the euro since April 2022 at 0.8251 pence per euro.
This high level corresponds to a clear sign that the market “expects more interest rate reductions from the European Central Bank than from that of the Bank of England”, affirms Kathleen Brooks, specifying that the market is banking on six rate reductions for the ECB compared to three for the BoE.
