China’s yuan ends at 5-1/2-month high as investors welcome Biden-Xi meeting

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(updates price, adds comments)

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SHANGHAI, Nov 16 (Businesshala) – China’s yuan ended Tuesday’s domestic trading session at a 5-1/2-month high against the dollar, as investors looked at the tussle between US President Joe Biden and Chinese leader Xi Jinping. Conversation welcome.

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The onshore and offshore yuan both jumped, with the onshore spot price hitting a high of 6.3666 per dollar before ending the domestic trading session at 6.3770, the strongest close since June 1, up 0.11% from the previous late-night close. Was more.

Its offshore counterpart also rose at one point to 6.3616, the highest since June 1.

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Currency traders said the meeting between Biden and Xi indicated the possibility of improving bilateral ties and removing partial tariffs.

“The virtual summit was only to de-stress. It was not aimed at normalizing bilateral relations,” said Raymond Yeung, China’s economist at ANZ.

“The summit paves the way for subsequent trade talks, during which the US could soften its trade measures against China.”

The trade dispute between the world’s two largest economies has been one of the major factors affecting yuan and broader financial market sentiment over the years.

“I think the (US) president and his secretary of state are starting to look for ways to reach a compromise,” said Carl Tannenbaum, chief economist at Northern Trust.

“And it was actually just last week that some idea of ​​reducing tariffs against China was floated by Washington, and that was eagerly received in Beijing. So I want to be careful and not be overly optimistic. “

US Trade Representative Catherine Tai said last week that the Biden administration was gaining traction with China in talks over Beijing’s compliance with the Trump-era trade deal, but declined to predict the outcome as discussions continued. Gave.

“The likelihood of a substantial improvement in Sino-US relations within this year is unlikely,” said Marco Sun, chief financial markets analyst at MUFG Bank. The yuan is expected to strengthen on the stronger side of 6.4 per dollar in the near term. (Reporting by Vinny Zhou and Andrew Galbraith; Editing by Christian Schmollinger, Stephen Coates and Shaunak Dasgupta)

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