China's yuan set for biggest yearly loss since 1994<p style="" class="text-align-justify">And that is despite a surging recovery in the currency over the past two months, with USD/CNY having 7.30 at the peak in late October to early November. The over 8% decline will be the worst performance by the Chinese onshore yuan against the dollar since 1994 when China unified market and official rates.</p><p style="" class="text-align-justify">I've argued plenty of times during the course of the year that if China is allowing its currency to weaken, that is a major tailwind signal for the dollar to extend higher - as we saw during the August period <a href="https://www.forexlive.com/news/a-key-trigger-for-the-next-leg-higher-in-the-dollar-20220819/" target="_blank" rel="follow">here</a>.</p><p style="" class="text-align-justify">As such, this will continue to be a key consideration for the greenback going into next year as the Fed tightening cycle will be called into question and as China has moved away from its zero-Covid policy.</p>
This article was written by Justin Low at www.forexlive.com.
Source: China's yuan set for biggest yearly loss since 1994 (https://www.forexlive.com/news/chinas-yuan-set-for-biggest-yearly-loss-since-1994-20221230/https://www.forexlive.com/news/chinas-yuan-set-for-biggest-yearly-loss-since-1994-20221230/)
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