The Chinese yuan is losing ground against the currencies of its main trading partners, which may indicate an upcoming devaluation. In recent weeks, the yuan has remained stable relative to the dollar only because the dollar itself has been under pressure.
According to Steven Chiu, chief strategist for currency operations and rates in Asia, the yuan’s basket is likely to continue declining, as the Chinese currency usually lags behind its Asian neighbors during periods of dollar weakness.
Currency market experts predict that the CFETS index, reflecting the yuan’s exchange rate relative to a basket of 24 currencies of major trading partners, may continue to fall. This development could impact traders working with Chinese assets and requires increased attention to market fluctuations.
