Yuan’s Low‑Low: It’s Still Hanging on the Dollar’s Tailwind
The Chinese yuan is stuck at a “where‑are‑we‑going‑now?” spot, pretty close to the deepest dip it’s seen in 2023.
Why the Dollar’s Gloating?
The U.S. is cooking up a bullish inflation vibe that’s making the Federal Reserve look more hawkish than a teenage gamer with a cheap new console.
- Services boom: December’s data smacked the market with a surge in business activity that outpaced expectations, and price levels hit a high they’ve not seen since early 2023.
- Hired help: Job openings in November leapt by 259,000 to 8.098 million—six months high and a slam‑dunk for a tight labor market.
- Treasury tea leaves: U.S. 10‑year yields crept upwards, hovering near 4.7%—the highest since last late April—gently tugging the greenback’s strength.
China’s Bonds: A Downward Roller‑Coaster
Meanwhile, China’s government 10‑year bonds are taking a nosedive, making the gap between U.S. and Chinese yields wider than a canyon. That widening spread is shaking the yuan’s confidence.
Today’s Watch‑List
Keep your eyes peeled for next‑day releases—ADP Employment Change, Initial Jobless Claims, and FOMC minutes. If the labor market keeps showing off, Fed easing might hit pause, keeping the dollar boss.
And watch out for Trump’s inauguration. It could stir up a bit of chaos, pushing safe‑haven flows toward the U.S. dollar and putting more pressure on the yuan.
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