Rally in Dollar Poses New Challenge to China Recovery

  • HSBC sees yuan’s advance versus peers hurting exports
  • Yuan records biggest trade-weighted gain in eight months
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China’s already fragile economic recovery from the pandemic is facing a new challenge -- a relentless rally in the U.S. dollar.

The U.S. currency’s surge is helping the yuan record its largest gain in eight months on a trade-weighted basis in September, a Bloomberg replica of the official CFETS RMB Index shows. The gauge that tracks China’s currency versus 24 peers indicates the others weakened more versus the dollar than the tightly-managed yuan.