Last updated on October 18, 2023
In the latest market update, China’s currency, the yuan, has fallen to its lowest level in over a week against the US dollar. This decline is due to the dollar gaining strength and surpassing a crucial level. The main factor influencing this downturn is the U.S. Federal Reserve’s indication of keeping interest rates higher for an extended period of time.
The weaker yuan can be attributed to the relative strength of the dollar, as investors seek safer assets amid concerns about the global economic recovery. This increase in demand for the dollar has put pressure on the yuan, causing its value to drop. The Federal Reserve’s stance on interest rates has further exacerbated the situation, as it signals a potential widening interest rate differential between the United States and China. This gap in interest rates can make the dollar more attractive to investors, leading to a decline in the value of the yuan.
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