Huge Cash Piles Poised to Boost Yuan Should Biden Win, Citi Says
- Chinese exporters to sell dollar if Trump loses: strategists
- Yuan jumped to its strongest level since July 2018 this week
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A Joe Biden victory in November’s U.S. presidential elections has the potential to put a fresh charge in the yuan, according to Citigroup Inc. strategists.
That’s because Chinese exporters expect a more predictable U.S.-China trade relationship under a Democrat government, and will start selling their dollar cash piles to buy yuan, the strategists wrote in a note dated Thursday. Chinese firms are currently converting just 46% of their monthly exports into local currency, far below the historical average of 56% in data going back to 2013, according to Citi calculations.