China’s yuan strengthened after the country’s top leaders pledged to step up policy support for the flailing economy, while the euro and sterling steadied after several days of declines as investors awaited major central bank meetings.
The yuan firmed by more than 0.5% in both the onshore and offshore markets as investors cheered comments at the closely watched Politburo meeting, though many were still seeking specific details on greater stimulus measures.
The yuan traded offshore was last at 7.1444 per dollar and in the onshore market it was at 7.1454 per dollar. Chinese stocks, especially property names, also surged.
“Overall, the sheer range of issues that the meeting touched upon goes beyond what the markets had anticipated,” said Tommy Xie, head of Greater China research at OCBC.
“While the sweeping breadth of the topics was appreciated, the execution and depth of these policies will be the real test.”
Also propping up the yuan were China’s major state-owned banks selling U.S. dollars to buy yuan in both onshore and offshore spot markets on Tuesday, sources told Reuters.
