China’s yuan and stock market rally alongside good trade talks

Source:Global Times Published: 2019/10/14 14:20:24

Investors monitor stocks at a trading center in Chengdu, Southwest China's Sichuan Province on Wednesday. Photo: VCG

Both the Chinese yuan against the US dollar and the local stock market rallied on Monday, following "substantial progress" achieved during the latest round of trade consultations between the US and China.

The onshore yuan against the dollar rose over 500 points to reach a high of 7.0494 on Monday morning, while the offshore yuan strengthened beyond 7.0540 to the dollar.

"The rise in the yuan's exchange rate is mainly due to positive expectations from the trade consultations between the two sides as well as a weak dollar index," Zhao Qingming, a Beijing-based international finance expert, told the Global Times on Monday.

During the two-day talks between the US and China, which concluded Friday in Washington, the two sides achieved substantial progress in areas including agriculture, intellectual property rights protection, exchange rates, financial services, expansion of trade, technology transfers and mechanisms for dispute settlement, the Xinhua News Agency reported.

Considering the exchange rate change in the dollar, the euro and the Japanese yen, there's little possibility that the yuan will break its previous low point, Zhao said, adding that, "We still need to pay attention to the change in the US-China trade and economic relationship as well as domestic economic fundamentals."

The trade talks also contributed to A-share rises on Monday. In the morning session, the Shanghai Composite Index gained 1.38 percent to surge above the psychologically important 3,000 level. Shenzhen Component Index increased to 9,794.37 points, while Chinext Price Index rose 0.93 to 1,682.41.

Transaction volume surged in the Shanghai and Shenzhen bourses, with the amount in one hour exceeding that seen in a half day on Friday.

The Hang Seng Index also climbed 1.03 percent to 26,578.41 by noon on Monday.

China is scheduled to release GDP and CPI figures for this year's first three quarters this week, with the average forecast by nearly 20 institutions standing at 6.1 percent, domestic news site reported.


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