Yuan valuation looks rich against the dollar says BNY

 Yuan valuation looks rich against the dollar says BNY

It’s been a tough year for emerging Asian currencies but the Chinese yuan has strengthened and instead could now be at a relatively rich valuation against the dollar, according to one Hong Kong-based forex analyst. 

The CNY has been on a gradual appreciation versus the dollar over the last 18 months, going from 7 on 1 January 2021 to about 6.4 at the start of November, while other currencies in the region such as the Thai baht and Indonesian rupiah have declined against the greenback this year. 

BNY Mellon Markets says that this strong performance means the yuan is relatively rich from a valuation perspective, particularly in the light of China’s weakening economic outlook and ongoing power supply issue. 

Yuan has lowest volatiltiy in the region

BNY’s senior APAC market strategist, Wee Khoon Chong, pointed to the yuan’s year-to-date gains of over 2% or over 7% against its RMB basket (a trade-weighted valuation used by…

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