Yuan Declines Post-Tariffs, Stabilizes As Pboc Intervenes, While Trade Tensions Cloud Outlook

2025-04-03 02:30:27

(MENAFN- Investor Ideas) Investorideas, rated as a top 100 investment website for investment issues market commentary from George Pavel General Manager at Naga Middle East.

The Chinese yuan declined following Trump's tariff announcement. However, the currency later stabilised to a certain extent during the Asian session, while the 10-year government bond yield remains under pressure, hovering below 1.8%.

The latest round of tariffs, which added a 34% duty on top of an existing 20%, heightened concerns over China's export sector and broader economic outlook. As trade tensions escalate, the yuan could come under increased pressure.

During the Asian session, the yuan found support as the People's Bank of China (PBoC) stepped in to stabilise the currency. The central bank set a stronger-than-expected reference rate, indicating its intent to manage volatility and prevent excessive depreciation.

Looking ahead, the yuan's movement will depend on the trajectory of U.S.-China trade relations and the PBoC's approach to currency management. Traders could also monitor the Chinese government's reaction. Meanwhile, sliding yields could drag the currency to the downside.

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