On April 8 2025 the USD/CNH alternate charge reached an all-time excessive touching a degree of seven.4273. This was clearly a market response on the tit for that commerce warfare escalation between the US and China, Rabobank’s macro analyst Teeuwe Mevissen studies.
Yuan exhibits energy amidst escalated US tariffs
“This initially resulted within the US imposing import tariffs as excessive as 145% with China imposing tariffs on US imports of 125%. Nevertheless, quickly the US and China agreed to implement a commerce truce of 90-days which lowered tariffs to 50% for Chinese language exports and 30% for US exports. This 90-day pause was extended with one other 90-day pause after the primary pause ended on August 12 this 12 months.”
“Since then the USD/CNH alternate charge declined and has largely been buying and selling throughout the bandwidth of seven.10 and seven.20 since. In the mean time of writing USD/CNH is buying and selling at a degree of seven.15. Provided that since April this 12 months Chinese language items are actually topic to considerably increased US import tariffs, one might conclude that the yuan has held up fairly effectively. However when one takes a take a look at the Bloomberg greenback spot index a distinct image arises.”
“Whereas the Bloomberg greenback spot index dropped nearly 8% this 12 months, the USD/CNH alternate charge has ‘solely’ dropped with roughly 2.5%. As such the US-dollar has held up effectively towards the offshore yuan whereas it depreciated extra considerably towards different main currencies.”
