Economics
Rush Out of Dollars Into Yuan Signals Good Days Ahead for Risk
- Currency touched 5-month high versus dollar on trade optimism
- Trump administration has stopped calling China a manipulator
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Trade-deal optimism drove the Chinese yuan to a five-month high Monday, which could spur global economic growth and prompt investors to ditch the U.S. dollar in favor of riskier assets.
The Trump administration’s decision to stop labeling China a currency manipulator supported the move. A stronger yuan is good for growth and should encourage capital flows out of the safety of greenbacks, said Societe Generale strategist Kit Juckes, who recommends shorting the U.S. currency against the Canadian dollar, Norwegian krone and Swedish krona.