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What’s the Outlook for China’s Yuan in 2021?

The Chinese Yuan (Chinese currency) appreciated in 2020. First, there was a strong economic rebound in china from its early battle with COVID 19. Secondly in the U.S pandemic dislocations meant that homebound consumers switched spending away from services and toured goods many items were made in China from May 2020 through January 2021. The US dollar lost about 10% of its value against the Chinese Yuan.


100 Chinese yuan 


 Now the Chinese lead in recovering from the pandemic is shrinking as the U.S economy ramps up with massive fiscal stimulus and accelerated vaccine distribution these same factors that are bringing optimism to the US economy are allowing consumers to switch back to spending on services more spending on services leaves less money for goods implying some deceleration in the growth of Chinese exports. The factors that made the Chinese yuan strong in 2020 are either diminishing or reversing in 2021.

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