The real winner from the trade thaw between the US and China is proving to be the yuan.
The currency rose 0.66 percent to 6.8403 per dollar, taking its two-day gain to 1.7 percent, the biggest since at least 2007. Bonds rallied, with the yield
on 10-year government debt falling to its lowest level since April 2017, amid speculation the stronger currency will give policy makers room to ease monetary policy. The benchmark Shanghai stock gauge added 0.4 percent at the close.
“Investors are continuing the unwinding of short yuan positions,” said Ken Cheung, a
senior currency strategist at Mizuho Bank Ltd. in Hong Kong.
“I do not see much room for a further yuan rally, as the price actions of late should have largely priced in the positive news of a China-US cease-fire, and there’s plenty of uncertainty in the negotiations ahead.”