"Driven by Weaker Dollar and Other Factors"
The offshore Chinese yuan exchange rate has fallen below 7 yuan per US dollar. This marks the first time since September of last year that this psychological support level has been breached.
According to Bloomberg News on the 25th (local time), the offshore yuan/dollar exchange rate was trading at 6.9983 yuan per dollar as of 1:01 p.m. Korea time, down 0.0091 yuan from the previous session. At the same time, the onshore yuan/dollar exchange rate stood at 7.0062 yuan, and there is speculation that it too could fall below the 7 yuan mark for the first time since May 2023.
A decline in the yuan/dollar exchange rate indicates a weaker dollar and a stronger yuan. Chinese-language media outlets interpret this exchange rate trend as being influenced by the weakening of the US dollar, seasonal factors, and the solid performance of the Chinese economy.
The state-run Global Times explained that the dollar index, which measures the value of the US dollar against the currencies of six major countries (including the euro and yen), remains below 100. The outlet attributed the dollar’s weakness against other major currencies to expectations of a US policy rate cut, among other factors.
Additionally, there is analysis that the yuan is relatively strong domestically as China’s economic fundamentals have stabilized and improved.
Taiwan’s Central News Agency, citing expert opinions, reported that seasonal factors in foreign exchange transactions-such as increased year-end demand for yuan by companies-are also having an impact.
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