SHANGHAI: China’s yuan is set to end the week near a 13-month low against the dollar, as it trades in narrow ranges amid holidays, while investors watch 10-year yield differentials, near their lowest in 24 years, and prospects for US tariffs.
The yuan has hovered just below the critical level of 7.3 this week, with trading subdued during the holiday season, leading to fewer foreign exchange transactions as the end of the year approaches.
The spot yuan opened at 7.2951 per dollar and was trading 15 pips lower than the previous late session close at 7.299 by 0248 GMT, close to levels last seen in Nov. 2023.
“The yuan may be increasingly influenced by international factors unless robust policy support significantly boosts market confidence in the domestic economy,” analysts at Nanhua Futures said in a note.
“Only then can the internal fundamentals provide stronger support for the currency.”
One key uncertainty for the coming year is US President-elect Donald Trump’s tariff policy towards China, which many analysts fear could spur further yuan depreciation.
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