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A China Financial News article published by the central bank said the current round of U.S. dollar appreciation has reached its peak with limited upside. The yuan hit a two-week high after Fed Chair Powell said rate increases could be scaled back as soon as December.
The article cited record outflows from Chinese assets as context.
Expectations of slower U.S. rate hikes weaken the dollar, which supports dollar-priced commodities and eases pressure on Chinese importers. The impact depends on whether the Fed actually slows its pace.
scmp.comAmanda LeeDec 1, 2022After 1,637 past bearish macro events, DXY moved a median -0.2% over 5 sessions (39% higher; middle half -0.6% to +0.3%), and -0.2% over 20.
After 362 past bearish macro events, USDCNY moved a median -0.1% over 5 sessions (42% higher; middle half -0.4% to +0.1%), and -0.2% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
Powell's signal of scaled-back rate hikes and the PBoC view that dollar strength had peaked lifted the yuan to a two-week high, contributing to the fall in CNY per USD.
