Markets

China’s currency is gaining against the dollar

A.On the first trading day after the Golden Week in connection with the national holiday, optimism prevails on the Chinese stock exchanges. The People’s Republic as the country of origin of the corona virus seems to be getting the pandemic under control. The collapsed car market is reporting back with a recovery and even domestic tourism was able to approach 80 percent of the pre-crisis level.

While investors in neighboring Japan played it safe, the markets in mainland China posted significant price gains after a week-long holiday break. In the People’s Republic, the Shanghai stock exchange was 1.7 percent up. The combined index of the most important companies in Shanghai and the South China Shenzen Stock Exchange gained 2.1 percent.

The local currency, the yuan, also appreciated by more than one percent against the dollar and was trading at the highest level in seventeen months. The sentiment was brightened by the latest economic data. The recovery in the Chinese service sector continued for the fifth time in a row in September. Consumption-oriented values ​​were in demand after Chinese domestic tourism saw a robust boom over the holidays, according to official data. “The rapid recovery may have eased worries about China’s growth momentum, but it’s too early to be complacent,” wrote Betty Wang, chief China economist at ANZ.

What is apparently also driving the optimism of the Chinese markets is the hope that China’s opponent Donald Trump will be defeated in the American presidential elections in early November. Observers expect a more China-friendly course from Trump’s challenger Biden, which could stimulate trade between the two largest economies.

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