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Home Business News Chinese yuan steady, traders monitor policy changes

Chinese yuan steady, traders monitor policy changes

17th Mar 25 12:17 pm

The Chinese yuan remains in a tight trading range, reflecting market caution amid ongoing economic uncertainty.

The governmentโ€™s โ€œSpecial Action Plan to Boost Consumptionโ€ unveiled recently, aims to stimulate domestic demand by increasing incomes and reducing financial burdens.

However, the sluggish consumer environment could make it difficult for the yuan to break from its range.

In the short term, the outlook for the yuan remains subdued, with clear signs of policy effectiveness needed before any significant movement can occur.

Meanwhile, the Chinese 10-year government bond yield has been rising, surpassing 1.94%. The increase in bond yields may attract foreign investment, potentially supporting the yuan. However, without consistent economic improvements, investor confidence could falter, weighing on the Chinese currency.

Economic indicators have been mixed. Chinaโ€™s industrial production rose 5.9% year-on-year in January-February, below Decemberโ€™s 6.2% but more than expected. Retail sales increased by 4% during the same period, providing a positive sign. While the mixed data could pressure the yuan, weaker industrial growth raises concerns about the sustainability of Chinaโ€™s economic recovery.

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