November 12, 2024 (Globalinvestorideas.com Newswire) Globalinvestorideas.com, a go-to platform for big investing ideas releases market commentary from George Pavel General Manager at Naga.com Middle East.
The Chinese yuan continues to weaken, notably against the U.S. dollar, following Donald Trump’s U.S. Presidential election victory. This decline is driven by concerns over potential trade policies and their impact on U.S.-China relations. The yuan’s depreciation reflects fears of increased tensions between the two countries, which could put additional downward pressure on the currency. With the greenback strengthening, the yuan remains one of the hardest-hit currencies, as the market reacts to the possibility of tougher trade measures. In the near to medium term, the outlook for the Chinese currency leans bearish, as trade uncertainties and potential policy shifts are expected to continue affecting the yuan.
Meanwhile, rising yields on the U.S. 10-year Treasury note reflect expectations that Trump’s policies could lead to higher inflation. The strengthening dollar is further exacerbating the yuan’s depreciation, adding pressure to the currency. Moreover, the anticipation of an aggressive dovish stance from the Federal Reserve has decreased, as market expectations adjust to the economic outlook under Trump’s policies. This shift in expectations has contributed to higher bond yields, reinforcing the strength of the dollar. The near- to medium-term outlook for U.S. bonds under Trump’s leadership suggests that yields are likely to remain elevated for some time.
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